Bond yields traded higher on Wednesday as India’s inflation based on wholesale price index (WPI) maintained the declining trend in the month of May 2023 at (-) 3.48% as against (-) 0.92% recorded in April 2023. Decline in the rate of inflation is primarily contributed by fall in prices of food articles, non-food articles and crude petroleum & natural gas, coal, mineral oils and electricity.
In the global market, benchmark U.S. 10-year Treasury yields rose on Tuesday, reversing initial declines after economic data pointed to a slowing pace of rising inflation as investors now braced for the Federal Reserve's policy announcement on Wednesday. Furthermore, oil prices climbed over 3% on Tuesday on hopes for growing fuel demand after China's central bank lowered a short-term lending rate for the first time in 10 months, boosting crude prices after steep losses the previous session.
Back home, the yields on new 10-year Government Stock were trading 1 basis point higher at 7.01% from its previous close of 7.00% on Tuesday.
The benchmark five-year interest rates were trading 1 basis point higher at 6.95% from its previous close of 6.94% on Tuesday.