Bond yields edged lower on Tuesday, on sustained demand from corporates and banks. However, further gains were muted as investors remained cautious ahead of the Reserve Bank of India (RBI)'s policy meeting that started today.
In the global market, U.S. Treasury yields rose on Monday before a heavy week of data, which will culminate in Friday's employment report for July, and as investors waited on Wednesday's refunding announcement for the coming quarter. Furthermore, U.S. oil opened above $50 per barrel for the first time since late May on Monday, supported by strong fuel demand, but ongoing high supplies from producer club OPEC kept prices from rising further.
Back home, the yields on new 10 year Government Stock were trading 3 basis points lower at 6.44% from its previous close of 6.47% on Monday.
The benchmark five-year interest rates were trading 2 basis points lower at 6.54% from its previous close of 6.56% on Monday.