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Bonds slip in absence of OMO announcement

27 Jun 2012 Evaluate

Bond slipped as the absence of any open market operation announcement (OMO) so far this week disappointed investors, thereby pushing the yields higher. On the global front, US Treasuries prices slipped on Tuesday as investors pushed for price concessions in auctions of new debt this week, although safe-haven flows limited the session's losses.

Meanwhile, Brent crude fell below $93 per barrel on Wednesday as heightened concerns that European leaders would fail to solve the region's intractable debt crisis at a key meet this week offset tighter North Sea oil supply concerns.

Back home, the yields on 10-year benchmark 8.79% - 2021 were trading 2 basis points higher at 8.36% from its previous close of 8.34% on Tuesday.

The benchmark five-year interest rate was up 1 basis point at 7.16% from its previous closing level of 7.15%.

The Government of India have announced the sale (new/re-issue) of  four dated securities for  Rs 15,000 crore, which include (i) “New 5 year Government Stock 2017” for a notified amount of  Rs 4,000 crore (nominal) through yield  based auction;  (ii) “8.15 percent Government Stock 2022” for a notified amount of  Rs 7,000 crore (nominal) through price based auction;  (iii) “8.97 percent Government Stock 2030” for a notified amount of  Rs 2,000 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 on June 29, 2012.

The Reserve Bank of India has announced the auction of 364-day and 91-day Government of India Treasury Bills for notified amount of  Rs 5,000 crore and Rs 10,000 crore respectively. The auction will be conducted on June 27, 2012 using 'Multiple Price Auction' method. The allocation to the non-competitive bidders will be outside the notified amount at the discretion of the Bank.

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