Bond yields were trading lower in a ranged market with traders now awaiting the RBI policy for further cues. In a severe disinflationary trend warranting a radical measure, the annual rate of inflation, based on monthly wholesale price index (WPI) ebbed to- 2.65% in April as compared to -2.33% witnessed in March. The number was also way lower than the street expectation of a figure of -2.07% for the month under review.
On the global front, US treasury yields ended higher on Wednesday in choppy trading after the treasury saw strong demand for a new $24 billion sale of 10 year notes, a sign that higher yields are drawing some buyers back to the markets. Meanwhile, oil slipped on Thursday as weak data from the world's top economies raised concern about the outlook for global fuel demand, offsetting data that showed a large drawdown in U.S. crude stockpiles last week.
Back home, the yields on 10 year Government Stock was trading 1 basis point lower at 7.95% from its previous close of 7.96% on Wednesday.
The benchmark five year swap rate was trading 1 basis point higher at 7.22% from its previous close of 7.21% on Wednesday.
The Government of India has announced the sale (re-issue) of the Government Stock through auctions to be held on May 15, 2015, including (i) 8.27 per cent GS 2020 for a notified amount of Rs 3000 crore, (ii) 8.15 per cent GS 2026 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.
The Reserve Bank of India will conduct overnight variable rate reverse repo auction for a notified amount of Rs 10,000 crore on May 14, 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.