Bond yields edged lower on Friday, tracking a fall in U.S. treasury yields. Sentiments got some support with RBI Governor Raghuram Rajan’s statement that the Indian economy was in a recovery phase and also that India’s exposure to Greece is limited and there will be little impact of the fallout. Further, promising a steady increase in FII investment limit in government bonds, RBI Governor said the ceiling will be revised twice a year and efforts are being made to make such investment easier.
In the global markets, US Treasuries prices rose on Thursday, rebounding from the prior day's selloff, as data showed an improving labor market cooled in June, raising doubts whether the Federal Reserve would end its near-zero interest rate policy later this year. Further, Oil prices declined in early trade as a rising US rig count stoked fears of oversupply and after Chinese regulators opened an investigation into suspected stock market manipulation.
Back home, the yields on 10 year Government Stock was trading 2 basis points lower at 7.79% from its previous close of 7.81% on Thursday.
The benchmark five year yields were trading down by 3 basis points at 7.97% from its previous close of 8.00% on Thursday.
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 8,000 crore and Rs 6,000 crore respectively. The auction was conducted on July 02, 2015 using 'Multiple Price Auction' method.