Bond yields were trading steady as traders remained cautious ahead of weekly bond sale of Friday and monetary policy review next week. Street is widely expected to ease rates further after unexpectedly doing so outside the monetary policy preview in January.
Marking the first reduction since May 2013, RBI Governor Raghuram Rajan on January 15, lowered the benchmark repurchase rate to 7.75% from 8%.
On the global front, the U.S. bond market's gauges on inflation expectations fell on Wednesday as the Federal Reserve acknowledged price growth may soften further due to the steep drop in oil prices. Meanwhile, oil remained weak in Asia on Thursday after data showing record U.S. stockpiles sent prices tumbling to the lowest level in nearly six years in the previous session and analysts said a global glut would continue to keep the market under pressure.
Back home, the yields on new 10 year Government Stock 2023 was trading 1 basis point lower at 7.70% from its previous close of 7.71% on Wednesday.
The benchmark five-year interest rate swaps were trading flat at Wednesday's close of 6.79%.
The Reserve Bank of India has announced the auction of 91 and 182 days Government of India Treasury Bills for notified amount of Rs 8,000 crore and Rs 6000 crore respectively. The auction will be conducted on January 28, 2015 using 'Multiple Price Auction' method.
The government of India announce the sale of four dated securities for Rs 13,000 crore on January 30, 2015, including (i) 8.27% Government Stock 2020 for a notified amount of Rs 3000 crore, (ii) 8.40% Government Stock 2024 for a notified amount of Rs 5000 crore, (iii) 8.24% Government Stock 2033 for a notified amount of Rs 2000 crore and lastly (iv) 8.17% Government Stock 2044 for a notified amount of Rs 3,000 crore.
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