Bond yields traded higher on Tuesday after the report stated that India is headed towards the driest monsoon season for the third time in three decades. Further, Investors overlooked the consumer price index (CPI) declining to a nine-month low of 3.66 per cent in August from 3.69 per cent in July, as the rate of food price rise went up to 2.20 per cent from 2.15 per cent.
In the global market, U.S. Treasuries prices were mostly flat on Monday on hesitation ahead of a two-day Federal Reserve policy meeting and on views that foreign central banks could continue selling U.S. government debt to strengthen their currencies. Furthermore, Oil prices steadied early on Tuesday as traders closed short positions and took on new longs after markets tumbled in the previous session.
Back home, the yields on new 10 year Government Stock were trading 1 basis point higher at 7.76% from its previous close at 7.75% on Monday.
The benchmark five year yields were trading 2 basis points higher at 7.90% from its previous close at 7.88% on Monday.
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.