Bond yields edged lower in the range-bound trade on Wednesday, tailing lower US treasuries overnight and appreciation of Indian currency in early deals on account of dollar weakness in the global markets mainly due to revived risk appetite. However, the yields are expected to stay in a broad range ahead of the Reserve Bank of India's policy review on Oct. 29, where at least a 25 basis points increase in the repo looks imminent.
On the global front, U.S. Treasuries yields fell to the lowest in three months on Tuesday after September job growth slowed to its weakest pace in 15 months, reducing expectations that the Federal Reserve would pare its bond purchases this year. Meanwhile, brent crude edged lower under $110 a barrel on Wednesday, supported by a weak dollar as disappointing U.S. jobs data raised hopes the U.S. Federal Reserve would stick to its economic stimulus this year.
Back home, the yields on 10-year 7.16% - 2023 bonds, were trading 3 basis points lower at 8.58% from its previous close of 8.61% on Tuesday.
The benchmark five-year interest rate swaps were trading 5 basis points lower at 8.18% from its previous close of 8.23% on Tuesday.
The Reserve Bank of India has announced the auction of 182-days Government of India Treasury Bills for notified amount of Rs 6,000 crore each. The auction will be conducted on October 23, 2013 using 'Multiple Price Auction' method.
