Bond yields edged lower on Wednesday as a recent rise in yields attracted buyers and a pickup in monsoon rains eased concern that farm output would be hit. Rainfall in the first half of the key crop-planting month has been 13 per cent higher than average, significantly better than expectations. Besides, speculation the Federal Reserve will signal a slow pace of monetary tightening at the end of its monthly meeting, also supported the bond prices. However, some Investors reminded cautious about a Greek default and departure from the eurozone.
In the global markets, U.S. Treasury yields fell on Tuesday as Greek Prime Minister Alexis Tsipras lashed out at Greece's creditors, increasing demand for safe-haven debt as investors worried that the country could default on its loans and leave the euro. Furthermore, Crude prices were virtually unchanged in early Asian trade on Wednesday as firm demand met strong output, with the market waiting for U.S. storage figures later in the day.
Back home, the yields on 10 year Government Stock was trading 4 basis points lower at 7.84% from its previous close of 7.88% on Tuesday.
The benchmark five year yields were trading down by 4 basis points at 8.06% from its previous close of 8.10% on Tuesday.
The Reserve Bank of India has announced the auction of 91-days and 182-days Government of India Treasury Bills for notified amount of Rs 9,000 crore and Rs 6000 crore respectively. The auction will be conducted on June 17, 2015 using 'Multiple Price Auction' method.