Bond yields edged higher, as trader’s made room for the sale of new 10 year bond, scheduled to be held tomorrow. However, a sharp rise of the safe haven yields is unlikely on expectation of 25 basis points rate cut by the Reserve Bank of India, in its upcoming monetary policy review on June 18, 2012.
On the global front, US Treasury bond yields, halting gaining momentum, edged lower in Asia on Thursday, as the prices of bonds rose, ahead of Federal Reserve Chairman Ben Bernanke's testimony before a congressional committee later on Thursday, with some trader’s placing massive bets at the possibility of more stimulus steps.
Meanwhile, Brent crude held steady above $100 on expectations that European Central Bank and the US Federal Reserve are prepared to take steps to revitalize the global economy, which in return would spur the demand of the commodity.
Back home, the yields on 10-year benchmark 8.79% - 2021 bonds rose 2 basis points to 8.39% from its previous close of 8.37%.
The benchmark five-year interest rate swaps were up 2 basis points at 7.33% from its previous close of 7.31%.
The Government of India announced the sale of four dated securities for Rs 15,000 crore on June 8, 2012, which includes, (i) “8.24 percent Government Stock 2018” for a notified amount of Rs 3,000 crore (nominal) through price based auction, (ii) “New 10 year Government Stock 2022” for a notified amount of Rs 7,000 crore (nominal) through yield based auction, (iii) “8.97 percent Government Stock 2030” for a notified amount of Rs 3,000 crore (nominal) through price based auction and (iv) “8.33 percent Government Stock 2036” for a notified amount of Rs 2,000 crore (nominal) through price based auction. The auctions will be conducted using uniform price method. The auctions will be conducted by the Reserve Bank of India, Mumbai Office, Fort, Mumbai, on June 08, 2012 (Friday).