Bond yields traded higher on Monday even after the fallout of China’s yuan devaluation and concern a U.S. interest-rate rise is imminent fueled an emerging-market selloff. Investors neglected the central bank Governor Raghuram Rajan’s statement that India is in a good position compared with other emerging markets due to strengthening economic growth, moderating inflation, low short-term currency liabilities and a narrowing fiscal deficit.
In the global market, U.S. 10-year treasuries yield falls below 2 percent for first time since late April, down 5 bps from Friday. Furthermore, Brent and U.S. crude oil futures hit fresh 6-1/2-year lows on Monday as investors fretted that a slowing Chinese economy will lead to weaker demand amid a global supply surplus.
Back home, the yields on new 10 year Government Stock were trading 4 basis points higher at 7.82% from its previous close at 7.78% on Friday.
The benchmark five year yields were trading 6 basis points higher at 7.95% from its previous close of 7.89% on Friday.
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 5,000 crore respectively. The auction will be conducted on August 26, 2015 using 'Multiple Price Auction' method.