Bond yields traded higher on Friday despite Reserve Bank of India (RBI) in its ‘minutes of the recent monetary policy committee (MPC) meeting’ said that the headline inflation is likely to witness a spike in the near months on account of supply disruptions due to adverse weather conditions. It said there are risks from the impact of the skewed south-west monsoon so far, a possible El Nino event and upward pressures on global food prices due to geopolitical hostilities.
In the global market, U.S. Treasury yields were higher on Thursday as investors await signals on monetary policy from central bankers at the upcoming Jackson Hole meeting. Furthermore, oil prices closed a volatile session slightly higher on Thursday, falling a dollar a barrel in early trading on demand worries and a strong dollar, but then bouncing back after a report of sliding gasoil stocks in Europe.
Back home, the yields on new 10 year Government Stock were trading 1 basis point higher at 7.20% from its previous close of 7.19% on Thursday.
The benchmark five-year interest rates were trading 3 basis points higher at 7.19% from its previous close of 7.16% on Thursday.