Bond yields eased yet again as sentiment remain bullish ahead of the sale of the new 10-year paper and as banks buy the current 10-year bond on hopes that it will be an OMO paper, which could fetch a good price. Expectations of sharper interest rate cuts after headline inflation dropped below the Reserve Bank of India's comfort level of 5 per cent have supported sentiment in the market.
On the global front, US Treasuries were supported on Friday after a deluge of soft US economic data helped the benchmark yield step away from two-month high hit earlier in the week. Meanwhile, Brent futures slipped towards $103 a barrel on Friday as disappointing US economic data revived worries over demand growth in the world's biggest oil consumer, while a stronger dollar also pressured prices.
Back home, the yields on 10-year 8.79% - 2021 bonds were trading 5 basis points lower at 7.34% from its previous close of 7.39% on Thursday.
The benchmark five-year interest rate swaps were trading 2 basis points lower to 6.70% from its previous close of 6.72% on Thursday.
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