Bond yields remained lower on hopes of improving cash conditions this week. Injections of Rs 30000 crore in government spending tied to the month-end period, and another Rs 33000 crore in government bond redemptions, are expected this week. Meanwhile, sharply higher buying seen in the 'others' category has built hopes of RBI supporting bonds.
On the global front, US Treasury debt prices clawed higher in choppy trading on Friday as news of slower-than-expected US economic growth in the first quarter supported the safe haven appetite for government securities and kept benchmark yields below 2 percent. Meanwhile, Brent crude edged lower towards $119 per barrel on Monday as economic woes in developed economies stoked fears of lower fuel demand, although the prospect of a third round of monetary easing by the United States limited its decline.
Back home, the yields on 10-year benchmark 8.79% - 2021 bonds edged 3 basis points lower to 8.62% from its previous close of 8.65%
The benchmark five-year interest rate swaps was up 1 basis point at 7.61% from its previous close of 7.60% on Friday.
The Reserve Bank of India has announced the auction of 91-day and 364-days Government of India Treasury Bills for notified amount of Rs 10,000 crore and Rs 5000 crore respectively. The auction will be conducted on May 2, 2012 using 'Multiple Price Auction' method.