Bond yields edged higher on Tuesday, on account of lower demand from corporates and banks. Sentiments were down-beat despite report that the Nikkei India Manufacturing Purchasing Managers’ Index, or PMI, rose to a 5 year high of 54.7 in December from 52.6 in November. The survey highlighted that strong business performance was underpinned by the fastest expansions in output and new orders since December 2012 and October 2016 respectively.
In the global market, year-end demand helped U.S. Treasuries prices end the year stronger on Friday, before a heavy week of data, though volumes were light before Monday's New Year's Day holiday. Furthermore, oil prices had their highest January opening since 2014, with Brent and WTI crude prices rising to mid-2015 highs, supported by ongoing supply cuts led by OPEC and Russia as well as strong demand.
Back home, the yields on new 10 year Government Stock were trading 4 basis points higher at 7.38% from its previous close of 7.34% on Monday.
The benchmark five-year interest rates were trading 3 basis points higher at 7.19% from its previous close of 7.16% on Monday.