Bond yields traded higher on Friday after India’s retail inflation grew at a faster-than-expected pace last month, limiting room for the central bank to cut interest rates further. Retail inflation, as measured by the consumer price index (CPI) for April accelerated to 5.39% as compared to 4.83% in March.
In the global market, U.S. Treasury prices fell on Thursday after a Federal Reserve official said the U.S. central bank should raise interest rates if data confirms a stronger jobs market and inflation outlook in the second quarter, noting that markets are too pessimistic on the economy. Furthermore, Oil prices dipped in early trading on Friday as a stronger dollar weighed and Russia warned that a global crude supply overhang could last into next year.
Back home, the yields on new 10 year Government Stock were trading 3 basis points higher at 7.45% from its previous close at 7.42% on Thursday.
The benchmark five-year interest rates were trading 2 basis points higher at 7.42% from its previous close at 7.40% on Thursday.