Bond yields edged tad higher on Tuesday in a range-bound trade, after hitting a more than two-week high in early trades, tracking a fall in U.S. Treasury yields. Nevertheless, prevailing sentiment continues to remain bullish on expectation of softer inflation print for the month of December due to a sharp fall in vegetable prices, which may prompt the central bank to pause yet again at its monetary policy review on January 28.
On the global front, US Treasuries rose on Monday after weaker-than-expected data on the US services sector raised hopes the Federal Reserve would slow its reduction of bond purchases, spurring bids for government debt. Meanwhile, brent oil futures climbed above $107 a barrel on Tuesday after five consecutive sessions of losses, as investors weighed mixed signals from Libya and cold weather across the central United States threatened production.
Back home, the yields on new 10 year Government Stock 2023 were trading 1 basis point up at 8.79%, after easing to 8.77% in early deals from its previous close of 8.78% on Monday.
The benchmark five-year interest rate swaps were trading steady a more than two-week low of 8.35%.
The Reserve Bank of India has announced the auction of 364 and 91 days Government of India Treasury Bills for notified amount of Rs 3,000 crore and Rs 4000 crore respectively, which will be conducted on January 8, 2014 using 'Multiple Price Auction' method.
The Government of India announced the sale of four dated securities for Rs 15,000 crore on January 10, 2014, which includes, (i) for 7.28 % Government Stock 2019 for a notified amount of Rs 3,000 crore (ii) 8.83 % Government Stock 2023 for a notified amount of Rs 7,000 crore, (iii) 8.32 % Government Stock 2032 for a notified amount of Rs 2,000 crore and lastly (iv) 9.23 % Government Stock 2043 for a notified amount of Rs 3,000 crore. The auctions will be conducted using uniform price method on January 10, 2014.
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