Bond yields traded flat on Friday as investors remained on the sidelines and refrained from any buying activity ahead of the US Federal Reserve's direction on key policy rates at a meeting scheduled on August 26, 2016. However, the prices may go up in near future as the RBI's slew of measures announced on Thursday can make the underlying market more liquid, improve intermediation and enhance corporates' access to global financial markets.
In the global market, U.S. Treasury yields ended higher on Thursday after the government saw reduced demand for a sale of new seven-year notes, ahead of a highly anticipated speech by Federal Reserve Chair Janet Yellen on Friday. Furthermore, oil prices dipped in early trading on Friday after the Saudi energy minister tempered expectations of strong market intervention by producers during talks next month.
Back home, the yields on new 10 year Government Stock were trading flat from its previous close at 7.12% on Thursday.
The benchmark five-year interest rates were trading 1 basis point lower at 7.03% from its previous close of 7.04% on Thursday.