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Bond yields edge tad lower on easing inflation concern

05 Nov 2012 Evaluate

Bond yields were trading tad lower as softening commodity prices eased inflationary concerns. However, on the other hand, HSBC India services PMI data released today showed that inflation readings continued to show an uptick, with higher raw material costs and solid demand keeping inflation pressures firm.

On the global front, US 10-year Treasuries held steady in Asian trade on Monday as investors awaited the outcome of Tuesday's presidential election. Meanwhile, Brent crude edged above $106 per barrel on Monday as a more than 2 percent drop on Friday attracted some buyers, although investors remained focused on the US presidential elections and demand worries.

The yields on 10-year 8.79% - 2021 were trading 1 basis point lower at 8.19% from its previous close of 8.20%.

The benchmark five-year interest rates were trading 1 basis point lower at 7.08% from its previous close of 7.09%.

The Reserve Bank of India has announced the auction of 91-day and 128-day Government of India Treasury Bills for notified amount of Rs 5,000 crore each. The auction will be conducted on November 07, 2012 using 'Multiple Price Auction' method.

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