Bond yields traded higher on Friday despite rating agency CRISIL projected CPI Inflation at 6.4% for fiscal 2021. it said after eight months above the Reserve Bank of India (RBI's) target band of 2-6%, Consumer Price Index (CPI) inflation was finally back in range, declining for the second straight month to a below-consensus 4.6% in December, from 6.9% in November.
In the global market, Treasury yields rose on Thursday after dovish comments from Federal Reserve Chairman Jerome Powell boosted expectations for a jump in inflation, and before President-elect Joe Biden was to announce details of a new stimulus package. Furthermore, oil prices were mixed as strong import data from China, the world's biggest crude importer that boosted sentiment earlier ran into concerns about Chinese cities in lockdown due to coronavirus outbreaks.
Back home, the yields on new 10 year Government Stock were trading 4 basis points higher at 5.96% from its previous close of 5.92% on Thursday.
The benchmark five-year interest rates were trading 3 basis points higher at 5.26% from its previous close of 5.23% on Thursday.