Bond yields trade lower on Wednesday, on sustained demand from corporates and banks. Bond sentiments got some support with finance minister Arun Jaitley’s statement that the Centre will stick to its fiscal deficit target of 3.2% of gross domestic product (GDP) for 2017-18.
In the global market, the U.S. Treasury yield curve flattened to its lowest levels since December 2007 as more hawkish Federal Reserve officials led intermediate-dated notes to underperform long-term bonds, which are being supported by falling inflation. Furthermore, oil prices held around multi-month lows in early Asian trading as investors discounted evidence of strong compliance by OPEC and non-OPEC oil producers with a deal to cut global output.
Back home, the yields on new 10 year Government Stock were trading 3 basis points lower at 6.42% from its previous close of 6.45% on Tuesday.
The benchmark five-year interest rates were trading 3 basis points lower at 6.67% from its previous close of 6.70% on Tuesday.