Bond yields traded lower on Monday on the back of buying activity picking up in bonds on positive economic data, as industrial production expanded at better than-estimated 4.2 per cent in July this year compared to the same month last year with improving manufacturing activity and offtake of capital goods. Some support also came with Wholesale Price Index (WPI) inflation declining to (-) 4.95 per cent in August from (-) 4.05 per cent in July.
In the global market, U.S. Treasury prices gained on Friday as investors focused on whether the Federal Reserve is likely to raise interest rates for the first time in almost a decade. Furthermore, Oil prices dipped on Monday as weakening demand weighed on international markets, although U.S. futures received some support from reduced American drilling.
Back home, the yields on new 10 year Government Stock were trading 1 basis point lower at 7.76% from its previous close at 7.77% on Friday.
The benchmark five year yields were trading 2 basis points lower at 7.89% from its previous close at 7.90% 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 5,000 crore respectively. The auction will be conducted on September 16, 2015 using 'Multiple Price Auction' method.