Bond yields edged lower on Friday, on sustained demand from corporates and banks. However, gains were limited on report stating the country’s current account deficit (CAD) is likely to treble to $10-12 billion in the fourth quarter of the current financial year, against the same year-ago period, due to higher trade deficit. The current account deficit had increased to $13.5 billion, or 2 per cent of the gross domestic product (GDP) in the third quarter as well, against $8 billion, or 1.4 per cent of GDP in the same year-ago period.
In the global market, U.S. Treasury prices gained on Thursday on rising risk aversion as President Donald Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China. Furthermore, oil prices jumped more than 1 percent, pushed up by Saudi plans for OPEC and Russian led production curbs introduced in 2017 to be extended into 2019 in order to tighten the market.
Back home, the yields on new 10 year Government Stock were trading 1 basis point lower at 7.55% from its previous close of 7.56% on Thursday.
The benchmark five-year interest rates were trading flat at its previous close at 7.38% on Thursday.