Bond yields traded flat on Tuesday, after private report cut India’s FY22 GDP growth estimate by a sharp 0.80 per cent to 9.2 per cent, saying the economic impact of the second wave of infections has been deeper than initially expected. It also mentioned that the slow pace of vaccinations in the country and the rolling lockdowns across many states for the estimate.
In the global market U.S. Treasury long-dated yields fell to two-week lows on Monday, after a few Federal Reserve officials affirmed their support to keep monetary policy accommodative for some time, dampening recent expectations the Fed would reduce bond purchases or flag rate hikes sooner than what it has indicated to the market. Furthermore, oil prices were steady, holding around one-week highs after jumping more than 3% the previous session as prospects of an early return of oil exporter Iran to international crude markets lessoned.
Back home, the yields on new 10 year Government Stock were trading flat with its previous close of 5.97% on Monday.
The benchmark five-year interest rates were trading 5 basis points lower at 5.49% from its previous close of 5.54% on Monday.