Bond yields receded on Wednesday after U.S. Federal Reserve Chair Janet Yellen suggested that Fed would not be rushing to hike interest rates. She added, however, that a rate increase is not likely for at least the next couple of meetings, and that the first hike would not necessarily come after the Fed removes the word 'patient' from its forward guidance.
However, the fall was limited on account of lack of significant appetite ahead of the Budget 15-16, which is scheduled to be presented on February 28, 2015 amidst concerns that the gross market borrowing of the government might be on the higher side.
On the global front, U.S. Treasuries prices rallied on Tuesday, erasing early losses after testimony from Federal Reserve Chair Janet Yellen kept the door open for a later than midyear interest rate hike and a two-year note auction met with strong demand. Meanwhile, Brent crude edged up towards $59 a barrel on Wednesday, helped by better than expected Chinese factory activity data, the Federal Reserve's flexible stance on U.S. interest rates and the euro zone's approval of reforms proposed by Greece.
Back home, the yields on new 10 year Government Stock 2023 were trading 2 basis points lower at 7.70% from its previous close of 7.72% on Tuesday.
The benchmark five-year interest rate swaps were trading 2 basis points lower at 6.91% from its previous close of 6.93% on Tuesday.
The Reserve Bank of India has announced the auction of 91 and 182-day Government of India Treasury Bills for notified amount of Rs 8,000 crore and Rs 6,000 crore respectively. The auction will be conducted on February 25, 2015 using 'Multiple Price Auction' method.