Bond yields edged lower on Monday, as investors’ sentiments remained optimistic amid rate cut optimism. Markets expect the RBI to cut interest rates on falling inflation in the coming RBI policy meet, which will start tomorrow.
In the global market, U.S. Treasury yields fell after data showed that U.S. labor costs rose less than expected in the second quarter, adding to concerns that inflation will remain low. Furthermore, Oil prices hit over two-month highs, lifted by a tightening U.S. crude market and the threat of sanctions against OPEC-member Venezuela.
Back home, the yields on new 10 year Government Stock were trading 1 basis point lower at 6.45% from its previous close of 6.46% on Friday.
The benchmark five-year interest rates were trading 1 basis point lower at 6.54% from its previous close of 6.55% on Friday.