Bond yields traded flat on Tuesday with easing food prices, retail inflation fell marginally to 5.30 per cent in August. The retail inflation based on the Consumer Price Index (CPI) was 5.59 per cent in July and 6.69 per cent in August 2020. Inflation is within Reserve Bank of India's (RBI's) 2 per cent -6 per cent comfort range for a second month. But it has been above the medium-term target of 4 per cent for nearly two years.
In the global market, U.S. government bond yields dipped on Monday as traders look ahead to data that is expected to show a continuing slowdown in the pace of consumer price increases. Furthermore, oil prices extended gains, hovering near a six-week high, on signs another storm could affect output in Texas this week even as the U.S. industry struggles to return production after Hurricane Ida wreaked havoc on the Gulf Coast.
Back home, the yields on new 10 year Government Stock were trading flat with its previous close of 6.19% on Monday.
The benchmark five-year interest rates were trading 1 basis point higher at 5.63% from its previous close of 5.62% on Monday.