Bond yields traded lower on Friday despite industrial production, measured on the basis of Index of Industrial Production (IIP), grew slightly by 0.2 per cent in September 2020 with higher output of mining and power generation sectors. The IIP had contracted by 4.6 per cent in September 2019, while 7.36 per cent contraction posted in August 2020.
In the global market, U.S. Treasury yields sank on Thursday, weighed down by the persistent rise in coronavirus cases around the world and data showing inflation remained benign in the world's largest economy. Furthermore, oil prices fell as a spike in the number of COVID-19 infections raised fears for the global economy and near-term fuel demand, but remained on track for a second straight weekly gain amid hopes for a vaccine.
Back home, the yields on new 10 year Government Stock were trading 3 basis points lower at 5.87% from its previous close of 5.90% on Thursday.
The benchmark five-year interest rates were trading 4 basis points lower at 5.11% from its previous close of 5.15% on Thursday.