Bond yields edged higher on Friday after the central bank said it will use a variety of instruments to absorb excess liquidity in the banking system. RBI has also maintained status quo on policy rate by leaving the repurchase rate (or repo rate) unchanged at 6.25% in its first bimonthly policy of FY18. Overnight gains in crude oil prices, following American missile strikes on a Syrian airbase in response to President Bashar al-Assad's forces' deadly chemical attack in a rebel-held area, may also damp demand for notes.
On the global front, US Treasury yields edged lower on Thursday amid uncertainty ahead of a key US jobs report Friday and a meeting between U.S. President Donald Trump and Chinese President Xi Jinping, and also over the fate of Trump's pro-growth agenda. Furthermore, oil prices soared by around $1 per barrel after the United States launched dozens of cruise missiles at an airbase in Syria.
Back home, the yields on new 10 year Government Stock were trading 6 basis points higher at 6.82% from its previous close of 6.76% on Thursday.
The benchmark five-year interest rates were trading 7 basis points higher at 7% from its previous close of 6.93% on Thursday.