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Bond yields edge higher on rupee weakness on Friday

24 Apr 2015 Evaluate

Bond yields edged higher on Friday on rupee weakness and prevailing cautious sentiment ahead of bond auction. On the current front, Indian rupee hit a fresh three month high against dollar on Friday on renewed demand from American currency from banks and importers while, negative local equities also weighed on the sentiment.

The yields in previous trading session dropped to two week low on rate cut optimism after a Reserve Bank of India adviser said there was scope to lower interest rates further.

On the global front, U.S. Treasuries yields fell on Thursday with benchmark yields retreating from 3-1/2-week highs as investors stepped back in the bond market a day after a broad selloff in Treasuries, German Bunds and British Gilts. Meanwhile, crude oil futures fell 0.65 per cent to Rs 3,664 per barrel today as speculators reduced their positions amid a weakening trend in Asian trade.

Back home, the yields on 10 year Government Stock was trading 1 basis point higher at 7.06% from its previous close of 7.05% on Thursday.

The benchmark five year swap rate was trading 1 basis point lower at 7.06% from its previous close of 7.07% on Thursday.

The Government of India have announced the sale (re-issue) of the Government Stock through auctions to be held on April 24, 2015, including (i) New Security maturing on December 15, 2023 for a notified amount of Rs 3000 crore, (ii) 8.15 per cent GS 2026 for a notified amount of Rs 7000 crore, (iii) 8.24 per cent GS 2033 for a notified amount of Rs 3000 crore and lastly (iv) 8.17 per cent GS 2044 for a notified amount of Rs 3000 crore.

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