Bond yields edged higher despite reports that private brokerage firm cutting steeply its FY2021 GDP forecast for India from -0.4% to -5.2%. The firm added that the government's decision to borrow Rs 12 lakh crore (revised higher from Rs 7.8 lakh crore) means that the fiscal deficit, by the official math, can be pegged at 5.5-6% of GDP.
In the global market, Two-year Treasury yields hit record lows on Friday and fed fund futures implied the Federal Reserve could cut rates into negative territory, though analysts said the move was likely technical as investors betting on higher rates were squeezed out of their positions. Furthermore, oil prices slid nearly $1 a barrel as concern over a persistent glut and economic gloom caused by the coronavirus pandemic combined to cancel out support from supply cuts at some of the world's top producers.
Back home, the yields on new 10 year Government Stock were trading 20 basis points higher at 6.16% from its previous close of 5.96% on Friday.
The benchmark five-year interest rates were trading 19 basis points higher at 5.69% from its previous close of 5.50% on Friday.