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Bond yields steady in absence of major trigger

16 Oct 2012 Evaluate

Bond yields were trading steady as rally in oil prices overnight limited any downward pressure on the yields. Further, the yields are expected to trade in an 8.10-8.20% range until the RBI's policy review on October 30.

On the global front, US 10-year Treasury yield held steady within a recent range on Tuesday, as investors awaited the November US presidential election and further clarity on when Spain may ask for a bailout package. Meanwhile, Brent futures were trading above $115, underpinned by supply concerns after the European Union slapped more sanctions on Iran, while ample supplies and healthy inventory at top consumer the United States capped gains to some extent.

The yields on 10-year benchmark 8.79% - 2021 were trading steady at its previous close of 8.17%.

The benchmark five-year interest rates fell 1 basis point at 7.00% from its previous close of 7.01%.

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 5,000 crore each. The auctions will be conducted on October 17, 2012 using 'Multiple Price Auction' method.

The Government of India have announced the sale (re-issue) of three dated securities for Rs 13,000 crore on October 19, 2012, which includes (i) “8.19 percent Government Stock 2020” for a notified amount of  Rs 3,000 crore (nominal) through price based auction; (ii) “8.20 percent Government Stock 2025” for a notified amount of  Rs 7,000 crore (nominal) through price based auction; and (iii) “8.83 percent Government Stock 2041” for a notified amount of  Rs 3,000 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, Fort, Mumbai on October 19, 2012 (Friday).

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