Bond yields, after spiking up sharply in the previous session, edged tad lower on Monday, tracing lower crude oil prices after the Chinese economy showed further signs of slowing, which may help ease local inflationary pressures. Meanwhile, bond gains were also supported by a fall in US Treasury yields to their lowest levels in three weeks in the previous session, after Bernanke's speech increased expectations of further stimulus.
On the global front, US 10-year Treasuries were not trading in Asian trade on Monday as US markets were closed in observance of the Labour Day market holiday. Meanwhile, Brent crude edged lower on Monday after Chinese data pointed to a further slowdown in the world's No 2 oil consumer; however, further downside of Brent crude was limited as investors remained optimistic that more global economic stimulus measures would be on the way.
The yields on 10-year benchmark 8.79% - 2021 edged 1 basis point lower at 8.23% from its previous close of 8.24% on Friday.
The benchmark five-year interest rates edged 2 basis points lower at 7.15% from its previous close of 7.17%.
The Reserve Bank of India has announced the auction of 91-day and 364-day Government of India Treasury Bills for notified amount of Rs 7,000 crore and Rs 5,000 crore respectively. The auction will be conducted on September 5, 2012 using 'Multiple Price Auction' method.
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