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Bond yields tread water ahead of Rs 15,000 debt sale auction later in the day

03 Jan 2014 Evaluate

Bond yields were treading water on Friday as dealers were cautious of adding position ahead of Rs 15,000 crore debt sale auctions to be held later part in the session. The bond yields also turned flat as loses of rupee were counterbalanced by fall in US treasury yields overnight. On the currency front, rupee slipped further beyond two-week low against dollar even as Prime Minister, Manmohan Singh, highlighted that the economy was set for better time. Further, he added that all emerging economies, including India, faced slowdown in the past couple of years but the global growth cycle is turning for the better. 

On the global front, U.S. Treasury prices rose on Thursday with benchmark yields dipping below 3 percent from their 2-1/2-year highs, as investors socked some money back into bonds from stocks that had enjoyed their strongest annual gain in more than 15 years. Meanwhile, brent crude rose towards $108 a barrel on Friday after posting its biggest daily percentage drop in six months in the previous session, although expectations for a rise in Libyan supply and speculation of a buildup in U.S. stockpiles capped gains.

Back home, the yields on new 10 year Government Stock 2023 were trading steady at its previous close of 8.84% on Thursday.

The benchmark five-year interest rate swaps were trading 2 basis points lower at 8.40% from its previous close of 8.42% on Thursday.

The Government of India have announced the sale (re-issue) of four dated securities for Rs 15,000 crore, including (i) 8.12% Government Stock 2020 for a notified amount of Rs 4000 crore, (ii) 8.24 % Government Stock 2027 for a notified amount of Rs 7000 crore, (iii) 9.20 % Government Stock 2030 for a notified amount of Rs 2000 crore, and (iv) 8.30% Government Stock 2042 for a notified amount of Rs 2000 crore, on January 03, 2014.

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