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Bond yields trade higher on Thursday

06 Jan 2022 Evaluate

Bond yields traded higher on Thursday even after ICRA Ratings warned that the third wave of the pandemic, which has seen a massive spike in infections after the more infectious Omicron variant of the coronavirus appeared, is likely to shave 40 bps off the fourth quarter GDP growth that may print in at 4.5-5 per cent.

In the global market, U.S. Treasury yields soared on Wednesday after minutes of the last Federal Reserve policy meeting came in more hawkish than expected, flagging three or more interest hikes this year to quell surging inflation. Furthermore, oil prices lost ground, easing from their highest levels in more than a month as OPEC+ producers stuck to a plan to boost production and U.S. fuel stockpiles surged amid declining demand.

Back home, the yields on new 10 year Government Stock were trading 3 basis points higher at 6.53% from its previous close of 6.50% on Wednesday.

The benchmark five-year interest rates were trading 4 basis points higher at 5.97% from its previous close of 5.93% on Wednesday.


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