Bond yields edged lower in a range-bound trade ahead of retail inflation data due on February 12, 2015. Investors expect retail inflation will be pushed slightly higher at 5.4 pct but still within RBI's expectations. Furthermore, investors would also be eyeing Industrial Production data for the month of December too will be released on the same day.
On the global front, U.S. Treasury debt prices fell on Tuesday, bumping benchmark 10-year yields above 2 percent for the first time in a month as investors positioned for a probable mid-2015 rate hike by the Federal Reserve and big government bond auctions. Meanwhile, brent crude held steady above $56 a barrel on Wednesday, and US crude rose briefly more than $1, after a smaller-than-expected rise in U.S. crude stocks was viewed by some as a sign that a supply glut was starting to abate.
Back home, the yields on new 10 year Government Stock 2023 were trading 1 basis point lower at 7.72% from its previous close of 7.73% on Tuesday.
The benchmark five-year interest rate swaps were steady at 6.93 percent, while the one-year rate flat at 7.65 percent.
The Reserve Bank of India will conduct overnight repo variable rate auction for a notified amount of Rs. 30,000 crore on February 9, 2015. The auction will be conducted between 12.00 pm and 12.30 pm as per the revised guidelines on Term Repo Auctions issued on February 13, 2014.