Bond yields edged higher on Friday as investors awaited a fresh supply of notes while keeping an eye out for the crucial U.S. nonfarm payrolls data, which, if strong, will further solidify bets of a Federal Reserve rate increase this month. However, the underlying sentiment remains positive on bets the Reserve Bank of India will deliver a rate cut next week.
In the global market, U.S. Treasury yields surged on Thursday with benchmark yields touching their highest levels in roughly a year and a half on expectations that gains in oil prices and U.S. President-elect Donald Trump's policies would fuel higher inflation. Furthermore, oil prices slipped as some investors opted to cash out after Brent touched 16-month a high on Thursday, with optimism over this week's OPEC-Russia accord on cutting output giving way to questions on the 'sticking point' of implementing the deal.
Back home, the yields on new 10 year Government Stock were trading 1 basis point higher at 6.23% from its previous close of 6.22% on Thursday.
The benchmark five-year interest rates were trading 2 basis points higher at 6.20% from its previous close of 6.18% on Thursday.