Bond yields traded higher on Monday as investors remained cautious ahead of the announcement of consumer price index (CPI) data for the month of September 2015 and the industrial production data for August 2015 after market hours today and as oil prices extended last week’s rally. Investors overlooked the Chief Economic Advisor Arvind Subramanian’s statement that growth in collection of indirect taxes in the first half of the current fiscal shows robust GDP expansion where Indirect tax collection increased 35.8 percent in the April-September period of the 2015-16 fiscal to Rs 3.24 lakh crore.
In the global market, U.S. Treasuries rose on Friday in light, choppy trading, as several Federal Reserve officials hinted that an interest rate increase later this year remains possible even after the soft September payrolls report. Furthermore, Oil prices rose in early Asian trading on Monday after U.S. drillers cut oil rigs for six straight weeks, while traders awaited Chinese trade data to be published following the one-week National Holiday.
Back home, the yields on new 10 year Government Stock were trading 3 basis points higher at 7.57% from its previous close of 7.54% on Friday.
The benchmark five-year interest rates were trading 1 basis point higher at 7.65% from its previous close of 7.64%. 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 8,000 crore and Rs 6,000 crore respectively. The auction will be conducted on October 14, 2015 using 'Multiple Price Auction' method.