Bond yields edged lower on Tuesday, on sustained demand from corporates and banks. However, gains remained capped as investors remained cautious ahead of Reserve Bank of India’s (RBI’s) second bi-monthly monetary policy outcome for 2018-19, due on June 6.
In the global market, U.S. Treasury yields rose on Monday with the 10-year yield hitting one-week highs as investors pared safe-haven holdings of lower-risk government debt due to fading fears about political turmoil in Italy and Spain. Furthermore, Oil prices rebounded after falling in the previous session on expectations that inventories in the United States may decline but increasing U.S. production and concerns that OPEC may raise output continue to weigh on sentiments.
Back home, the yields on new 10 year Government Stock were trading 2 basis points lower at 7.86% from its previous close of 7.88% on Monday.
The benchmark five-year interest rates were trading flat at its previous close at 7.87% on Monday.