Bond yields edged tad higher following heavy sales of debt by state run banks on Friday. Further, cautiousness ahead of key inflation and factory output data, which will set the tone for March 19 policy, also influenced the trading sentiment. Meanwhile, state-run banks that were heavy buyers of government debt for most of the last week, sold Rs 2,118 crore of debt on Friday.
On the global front, US 10-year Treasury yield edged higher in Asian trade on Monday and hovered within range of an 11-month high hit on Friday after data showed US job growth picked up more than expected in February. US employers added a greater-than-expected 236,000 workers to their payrolls in February and the jobless rate fell to a four-year low, offering a bright signal on the economy's health. Meanwhile, Brent futures slipped further sub psychological $111 on Monday on demand growth concerns as latest data from China pointed to an uneven economic recovery in the world's second-biggest oil consumer, with a stronger dollar putting additional pressure on prices.
Back home, the yields on 10-year 8.79% - 2021 bonds were trading 1 basis point higher at 7.85% from its previous close of 7.84% on Friday.
The benchmark five-year interest rate swaps were trading unchanged from its previous close of 7.56% on Friday.
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