Bond yields edged lower after consumer prices for January came within market expectations and well below the central bank's inflation target, bolstering prospects for further interest rate cuts. Data showed that consumer prices rose an annual 5.11% compared with a 4.28% gain in December.
On the global front, US treasury prices pulled back from overnight lows to stand little changed on Thursday as weaker-than-expected reports on retail sales and jobless claims inserted some caution into the economic backdrop and forecasting of U.S. monetary policy. Meanwhile, Benchmark Brent crude held above $59 in Asia on Friday, up more than 3 percent this week as news of deeper industry spending cuts and a sinking U.S. dollar revived buying.
Back home, the yields on new 10 year Government Stock 2023 was trading 4 basis points lower at 7.70% from its previous close of 7.74% on Thursday.
The benchmark five-year interest rate swaps were trading 9 basis points lower at 6.89% from its previous close of 7.08% on Thursday.
The Reserve Bank of India will conduct overnight reverse repo variable rate auction for a notified amount of Rs 10,000 crore on February 12, 2015, Thursday. The auction will be conducted between 4.00 pm and 4.30 pm as per the revised guidelines on Term Repo Auctions issued on February 13, 2014.
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