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Bond yields stuck in tight range ahead of RBI’s quarterly monetary policy meet

28 Oct 2013 Evaluate

Bond yields, in a range-bound session of trade, were trading tad higher, with the market gearing up for the central bank's monetary policy review on Tuesday, amidst the expectation that India’s apex bank would hike key interest rates by 25 basis points, while further slashing MSF rate by the same quantum. Besides, traders will also watch the Reserve Bank of India's macroeconomic review for the first half of the fiscal year that started in April for cues on policy stand to be released later in the evening.

On the global front, U.S. Treasury debt prices rose on Friday with benchmark yields hovering near three-month lows, as investors shifted their focus to the Federal Reserve meeting next week, where it might signal to stick to the current size of its bond-purchase stimulus. Meanwhile, brent crude futures edged up to above $107 a barrel in cautious early Asia trade on Monday, taking a break after three days of losses as investors wait on the U.S. Federal Reserve's policy meeting later this week.

Back home, the yields on 10-year 7.16% - 2023 bonds, were trading 1 basis point higher at 8.59% from its previous close of 8.58% on Friday.

The benchmark five-year interest rate swaps were trading 1 basis point higher at 8.20% from its previous close of 8.19% on Friday.

The Government of India have announced the sale (re-issue) of '1.44% Inflation Indexed Government Stock-2023' for a notified amount of Rs 1,000 crore through price based auction. The auction will be conducted using uniform price method. The auction will be conducted by the Reserve Bank of India, Fort, Mumbai on October 30, 2013 (Wednesday).

The Reserve Bank of India has announced the auction of 91 and 364 days Government of India Treasury Bills for notified amount of Rs 6,000 crore each. The auction will be conducted on October 30, 2013 using 'Multiple Price Auction' method. 

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