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Bond yields inch lower in absence of debt sale

21 Jan 2013 Evaluate

Bond yields inched lower in the absence of a debt sale this week with investors staying cautious ahead of the RBI's third quarter monetary policy review on January 29, 2012. Traders, paring back bets for a 50 bps rate cut after governor D Subbarao’s statement of inflation still remaining high; now expect a 25 bps cut.

On the global front, US Treasury debt prices rose on Friday as the previous session's sell-off lured bargain-minded investors and dealers bought bonds to exit hedges on the corporate debt issues they underwrote this week.

Closer home, the yields on 10-year 8.79% - 2021 were trading 1 basis point (bps) lower at 7.85% from its previous close of 7.86% on Friday.

The benchmark five-year interest rates were trading down by 3 basis points at 7.12% from its previous close of 7.15% on Friday.

The Reserve Bank of India has announced the auction of 91-day and 364-day Government of India Treasury Bills for notified amount of Rs 5,000 crore each. The auction will be conducted on January 23, 2013 using 'Multiple Price Auction' method.

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