Bond yields edged lower on Monday as a pickup in monsoon rains eased concern inflation will accelerate. Seasonal showers have been 16% above average since June 1, with 78 percent of India receiving excess or normal rain. Besides, speculation that the government may tweak debt limits for foreign institutional investors to allow higher participation is also aiding bonds.
In the global markets, US Treasury yields fell on Friday as Greece moved closer to a deadline to pay back debt, and as investors continued to grapple with whether the Federal Reserve is likely to begin raising U.S. interest rates this year. Furthermore, Oil prices eased on Monday, falling for a second session on concerns about the outcome of an emergency euro zone meeting later in the day on the Greek debt crisis and worries about oversupply.
Back home, the yields on 10 year Government Stock was trading 1 basis point lower at 7.70% from its previous close of 7.71% on Friday.
The benchmark five year yields were trading up by 1 basis point at 7.90% from its previous close of 7.89% on Friday.
The Reserve Bank of India has announced the auction of 91-days and 364-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 24, 2015 using 'Multiple Price Auction' method.