MoneyWorks4Me

Bond yields ease post release of single digit CPI number

13 May 2013 Evaluate

Bond yields eased a tad tracing the single digit consumer price inflation number and also on the hopes of another round of bond purchase by the Reserve Bank of India this week. In a big relief to policy-makers, annual rate of inflation, based on the consumer prices index (CPI), declining for second straight finally came in single digit at 9.39% in April as against 10.39% seen in the previous month.

On the global front, US Treasuries extended losses in Asia, with benchmark 10-year yields rising to 1.93% from around 1.89% on Friday. Meanwhile, Brent futures slipped towards $103 a barrel on Monday as the dollar stayed firm, with renewed worries of a slowdown in demand growth from the world's top oil consumer the United States further weighing on sentiment.

Back home, the yields on 10-year 8.79% - 2021 bonds were trading 2 basis points lower at 7.57% from its previous close of 7.59% on Friday.

The benchmark five-year interest rate swaps were trading 1 basis point higher at 6.85% from its previous close of 6.84% on Friday.

The Reserve Bank of India has announced the auction of 91 and 364-day Government of India Treasury Bills for notified amount of Rs 5,000 crore respectively. The auction will be conducted on May 15, 2013 using 'Multiple Price Auction' method.

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