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Bond yields tread water in absence of fresh positive triggers

28 Apr 2015 Evaluate

Bond yields were treading water in absence of fresh triggers, with traders now watching global crude oil and rupee for intra-day direction. Meanwhile, auction supply later this week continued to weigh on the sentiment.

On the currency front, Indian rupee, after snapping two consecutive sessions’ losing streak in previous session continued trading strong on Tuesday on dollar weakness overseas against the basket of other major currencies well ahead of US Fed meeting which commences today.

On the global front, US treasury prices were little changed on Monday as news suggesting progress for Greece to strike a deal with its lenders was offset by expectations the Federal Reserve will signal its intention to keep interest rates near zero. Meanwhile, Crude settled lower on Monday as ample global supply blunted support from the conflict in Yemen and the falling number of U.S. rigs drilling for oil and kept traders cautious after prices reached 2015 peaks last week.

Back home, the yields on 10 year Government Stock was trading unchanged at Monday’s close of 7.78%.

The benchmark five year swap rate was trading 1 basis point lower at 7.09% from its previous close of 7.10% on Monday.

 The Government of India has announced the sale (re-issue) of the Government Stock through auctions for Rs 16,000 crore to be held on April 30, 2015, including (i) 8.27 per cent GS 2020 for a notified amount of Rs 3000 crore, (ii) 8.40 per cent GS 2024 for a notified amount of Rs 7000 crore, (iii) 7.95 per cent GS 2032 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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