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Bond yields edge lower on Thursday

02 May 2024 Evaluate

Bond yields edged lower on Thursday amid Reserve Bank of India will likely delay cutting interest rates until the final quarter of the year, as inflation risks rise and the US Federal Reserve keeps rates on hold for longer.

In the global market, treasury yields fell on Wednesday, as investors digested the Federal Reserve’s move to ease the pace of balance sheet reduction, and the central bank’s chairman Jerome Powell ruled out the possibility of a rate hike next month. Furthermore, oil fell more than 1% on Wednesday, losing ground for a third straight session, sapped by the prospect of a ceasefire agreement in the Middle East and persistent U.S. inflation dampening the expected pace of interest rate cuts.

Back home, the yields on new 10 year Government Stock were trading 3 basis point lower at 7.16% from its previous close of 7.19% on Tuesday.

The benchmark five-year interest rates were trading 2 basis points lower at 7.18% from its previous close of 7.20% on Tuesday.

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