Bond moved higher and yields lower after the Central Bank announcement of the repo rate cut by 25 basis points to 6.50 percent. However, yields once again moved up as there was just talk of injecting liquidity but the exact time frame that when it will happen actually is not set.
In the global market, US Treasury yields edged down on Monday, with benchmark yields hovering near one-month lows as doubts about the durability of the U.S. economic expansion supported views the Federal Reserve may slow the pace of interest rate hikes. Furthermore, oil prices fell in early Asian trading on Tuesday on signs of weakening gasoline demand, long a pillar of support for struggling fuel markets, in both North America and Asia.
Back home, the yields on new 10 year Government Stock were trading 2 basis points higher at 7.43% from its previous close at 7.41% on Monday.
The benchmark five-year interest rates were trading flat from its previous close at 7.46% on Monday.
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 6,000 crore respectively. The auction will be conducted on April 06, 2016 using 'Multiple Price Auction' method.