Bond yields traded flat on Monday, as the wholesale price-based (WPI) inflation accelerated to a record high of 12.94 per cent in May, on rising prices of crude oil and manufactured goods. Low base effect also contributed to the spike in WPI inflation in May 2021. In May 2020, WPI inflation was at (-) 3.37 per cent. This is the fifth straight month of uptick seen in the wholesale price index (WPI)-based inflation. In April, 2021, WPI inflation hit double digit at 10.49 per cent.
In the global market, The U.S. dollar held steady against major currencies, after posting its biggest weekly gain in more than a month, as traders closed short positions ahead of a Federal Reserve policy meeting this week. Furthermore, oil prices held near multi-year highs, underpinned by an improved outlook for demand as increased COVID-19 vaccinations help lift travel curbs.
Back home, the yields on new 10 year Government Stock were trading flat with its previous close of 6.00% on Friday.
The benchmark five-year interest rates were trading 3 basis points higher at 5.54% from its previous close of 5.51% on Friday.