Bond yields traded lower on Monday, as Reserve Bank of India (RBI) in its latest data has showed that the year-long pandemic left households more indebted, which has sharply jumped to 37.1 per cent of GDP in Q2 of FY21, while their savings rate plunged to a low 10.4 per cent. The household savings plunged as the pandemic has led to tens of millions losing jobs and almost all forced to take deep pay-cuts, forcing them to borrow more or dip into their savings to meet expenses.
In the global market, U.S. Treasury yields eased on Friday from more than one-year highs, while the shortest end of the market flirted with negative rate territory as it tried to absorb a flood of cash from the nation's massive fiscal stimulus package. Further, oil prices resumed their decline, falling around 1% as worries about a drop in demand for fuel products in the wake of yet more European lockdowns dominated trading.
Back home, the yields on new 10 year Government Stock were trading 1 basis point lower at 6.18% from its previous close of 6.19% on Friday.
The benchmark five-year interest rates were trading 5 basis points lower at 5.71% from its previous close of 5.76% on Friday.