Bond yields traded higher on Wednesday with the government data showing that Consumer Price Index (CPI)-based inflation eased to 4.59 per cent in December 2020 compared to 6.93 per cent in November. Food inflation declined to 3.41 per cent in December, compared to 9.5 per cent in the previous month.
In the global market yields U.S. Treasury yields traded lower on Tuesday as strong demand for the Treasury Department's $38 billion sale of benchmark 10-year notes had traders covering short positions, which reversed an early rise in yields. Furthermore, oil prices rose, with U.S. crude gaining for a seventh day, after an industry report showed a further drop in inventories and investors shrugged off worsening developments in the pandemic.
Back home, the yields on new 10 year Government Stock were trading 2 basis points higher at 5.95% from its previous close of 5.93% on Tuesday.
The benchmark five-year interest rates were trading 2 basis points higher at 5.26% from its previous close of 5.24% on Tuesday.