Bond yields edged lower on Friday on expectation of rate cut for the third time in 2015 next week by the central bank. Street widely expects RBI to cut policy interest rates by 25 basis points in its June 2 policy and another 50 bps in the subsequent two quarters since the retail inflation is hovering at levels, much below foreseen by the central bank itself and the industry needs a demand trigger for a revival.
Back home, long-dated U.S. Treasury yields edged higher on profit-taking and new corporate supply, while short-dated yields fell after solid demand at a seven-year note auction indicated little concern about the eventual pace of Federal Reserve rate hikes. Meanwhile, brent crude prices dipped in early Asian trade on Friday as ongoing oversupply weighed on the market, but prices remained within a narrow range in place since April.
Back home, the yields on 10 year Government Stock was trading 2 basis points lower at 7.83% from its previous close of 7.85% on Thursday.
The benchmark five year swap rate was trading down 1 basis point lower at 7.10% from its previous close of 7.11% on Thursday.
The Government of India announce the sale of four dated securities for Rs 16,000 crore on May 29, 2015, including (i) 7.68% GS 2023 for a notified amount of Rs 3000 crore, (ii) 7.88% GS 2030 for a notified amount of Rs 7000 crore and (iii) 7.95% GS 2032 for a notified amount of Rs 3000 crore and lastly (iv) 8.17% GS 2044 for a notified amount of Rs 3000 crore