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Bond yields ease tailing crude oil prices; US Fed’s meet eyed

17 Mar 2015 Evaluate

Bond yields edged lower tracking lower crude oil prices, however further slide was prevented on account of caution ahead of Fed’s two days policy meeting which begins later on Tuesday. The U.S. Federal Reserve's two-day policy meet would be crucial since this would provide the trajectory of the US economy, which will also reveal as to when the rate hike might take place. Street widely expects Fed to drop the word 'patient' from its formal statement on the timing of its first interest rate increase since 2006.

On the global front, US treasuries prices edged higher on Monday on speculation the Federal Reserve could take a more cautious tone at its policy meeting this week, while low trading volume and a rally in US stocks capped gains. Meanwhile, Brent crude oil prices reversed most of their early gains to steady below $54 per barrel on Tuesday as high ongoing oversupply dragged on the market.

Back home, the yields on new 10 year Government Stock 2023 was trading 2 basis points lower at 7.79% from its previous close of 7.81% on Monday.

The benchmark five-year interest rate swaps was trading 3 basis points lower at 7.10% from its previous close of 7.13% on Monday.

The Reserve Bank of India has announced the auction of 364 and 91 day Government of India Treasury Bills for notified amount of Rs 6,000 crore and Rs 8,000 crore respectively. The auction will be conducted on March 18, 2015 using 'Multiple Price Auction' method.

The Reserve Bank of India will conduct overnight variable rate repo auction for a notified amount of Rs. 15,000 crore today (March 17, 2015, Tuesday). 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.

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