Bond yields edged higher on Friday as traders took some support with S&P Global Ratings stating that the Indian economy can handle some erosion of its foreign exchange reserves as its external position is very strong. Markets participants also awaiting the industrial growth data for June and retail inflation figures for July to be out later in the day.
In the global market, short-term Treasury yields slipped on Thursday and the yield curve steepened as market participants digested another economic report that showed a slowdown in inflation. Furthermore, Oil prices dropped in Asia trade on Friday amid an uncertain demand outlook, though benchmark contracts were headed for weekly gains as recession fears eased.
Back home, the yields on new 10 year Government Stock were trading 4 basis points higher at 7.30% from its previous close of 7.26% on Thursday.
The benchmark five-year interest rates were trading 3 basis points higher at 6.99% from its previous close of 6.96% on Thursday.