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Bond yields tread water; markets await OMO announcement

19 Nov 2012 Evaluate

Bond yields were treading water as market participants stayed on the sidelines awaiting announcement from the central bank on any possible open market operation (OMO) after repo bids came in above Rs 100,000 crore for three successive sessions last week. Further, OMO are also being expected in the wake of RBI Governor Duvvuri Subbarao's comments about inflation being still high, which dashed hopes of an early monetary easing before the Jan-March quarter.

On the global front, US Treasuries fell in Asia trading on Monday, pulling benchmark yields off a two-month low hit last week, on hopes that this week will bring some progress in the US fiscal crisis as well as the release of more funding for Greece. Meanwhile, US crude futures extended gains in early Asian trade on Monday, as fresh Israeli air strikes on the Gaza Strip and Palestinian rocket attacks reignited concerns over escalating tensions causing wider Middle East supply disruptions.

The yields on 10-year 8.79% - 2021 were trading steady at its previous close of 8.19% on Friday.

The benchmark five-year interest rates were trading 1 basis point higher at 7.14% from its previous close of 7.13%.

The Reserve Bank of India has announced the auction of 91-day and 182-day Government of India Treasury Bills for notified amount of Rs 5,000 crore each. The auction will be conducted on November 21, 2012 using 'Multiple Price Auction' method. 

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