Bond yields edged lower on Thursday as banks are struggling to invest the huge amount of excess deposits coming their way. Instead of parking the idle cash in the reverse repo window, banks are now taking duration risk and earning more by buying bonds.
In the global market, U.S. Treasury yields fell from multi-year highs on Wednesday after the Treasury Department saw very strong demand for an auction of seven-year notes, and after minutes from the Federal Reserve's November meeting contained no large surprises. Furthermore, oil prices were little changed as uncertainty ahead of a planned OPEC-led crude production cut and thin liquidity due to the U.S. Thanksgiving holiday kept traders from making big new bets on markets.
Back home, the yields on new 10 year Government Stock were trading 2 basis points lower at 6.26% from its previous close of 6.28% on Wednesday.
The benchmark five-year interest rates were trading 5 basis points lower at 6.19% from its previous close of 6.24% on Wednesday.