Bond yields edged higher tailing sharp depreciation of Indian currency, which may dent rate cut hopes, thereby weighing on safe haven bond. On the currency front, Indian rupee after making a weak start, continued trading beyond psychological ‘63/$’ level on Wednesday in the wake of global turmoil in stocks and currencies.
On the global front, the yield on U.S. 30-year Treasuries bonds approached its session low in late U.S. trading on Tuesday as the Dow Jones Industrial average and Standard & Poor's 500 index turned negative, wiping out their earlier rebound. Meanwhile, Brent crude futures fell for a fifth straight day on Tuesday to end below $60 a barrel, while U.S. crude finished a volatile session slightly higher as trading of expiring options helped defend the price above $55.
Back home, the yields on new 10 year Government Stock 2023 were trading 2 basis points higher at 8.01% from its previous close of 7.99% on Tuesday.
The benchmark five-year interest rate swaps were trading 8 basis points higher at 7.39% from its previous close of 7.47% on Tuesday.
The Government of India have announced the sale (re-issue) of the Government Stock through auctions to be held on December 19, 2014, including (i) 8.27 per cent GS 2020 for a notified amount of Rs 3000 crore, (ii) 8.40 per cent GS 2024 for a notified amount of Rs 6000 crore, (iii) 8.24 per cent GS 2033 for a notified amount of Rs 2000 crore and lastly (iv) 8.17 per cent GS 2044 for a notified amount of Rs 3000 crore.
The Reserve Bank of India will conduct overnight repo variable rate auction for a notified amount of Rs 40,000 crore on December 17, 2014. The auction will be conducted between 4.00pm and 4.30pm as per the revised guidelines on Term Repo Auctions issued on February 13, 2014.
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