Bond yields traded flat on positive bias on Tuesday after the central bank announced an open market purchase of notes this week ahead of a state debt auction where the quantum is lower than scheduled.
In the global market, U.S. Treasury yields rose on Monday, with the two-year yield hovering at its highest in two months, as traders bet the Federal Reserve may raise interest rates as early as June if the economy shows further improvement. Furthermore, Oil prices were little changed in thin Asian trade on Tuesday as a firmer dollar weighed on oil markets while a likely drawdown in U.S. crude and gasoline stockpiles pointed to stronger demand ahead of the U.S. summer driving season.
Back home, the yields on new 10 year Government Stock were trading flat from its previous close at 7.46% on Monday.
The benchmark five-year interest rates were trading 1 basis point lower at 7.42% its previous close at 7.43% 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 6,000 crore respectively. The auction will be conducted on May 25, 2016 using 'Multiple Price Auction' method.