Bond yields traded higher on Friday as Icra pegged the contraction in the economy at 7.8 per cent for 2020-21. Before the GDP numbers for Q2 were out, it had predicted the fall in the economy at 11 per cent. It said improving economic fundamentals, a bright outlook for the rabi season, and the visibility of vaccine availability are expected to strengthen demand.
In the global market, long-dated Treasury yields rose on Thursday afternoon on hopes the U.S. Congress would pass a $900 billion stimulus package before the weekend, shaking off morning data showing distress in the labor market. Furthermore, oil prices eased but stayed within touching distance of nine-month highs hit overnight as soaring COVID-19 cases weigh on fuel demand and U.S. lawmakers continue to battle over a $900 billion economic stimulus package.
Back home, the yields on new 10 year Government Stock were trading 1 basis point higher at 5.96% from its previous close of 5.95% on Thursday.
The benchmark five-year interest rates were trading flat with its previous close of 5.09% on Thursday.