Bond yields edged lower on Friday in the absence of a debt sale till the RBI meet, while hopes of RBI’s status quo stance in its upcoming monetary policy review on January 28, 2014, also bolstered sentiment for bonds that were headed for their biggest weekly win in a month. However, further gains of bonds are unlikely from this level as profit-booking may emerge around 8.58-60% levels.
On the global front, U.S. Treasury prices gained on Thursday after inflation data came in line with expectation and amid strength in German government debt and overnight demand for safe-haven U.S debt. Meanwhile, brent crude slipped toward $105 a barrel on Friday as concerns over a rise in supply from Libya and Iran dragged on prices, although an OPEC production cut checked losses.
Back home, the yields on new 10 year Government Stock 2023 were trading 2 basis points lower at 8.60% from its previous close of 8.62% on Thursday.
The benchmark five-year interest rate swaps were trading 1 basis point lower at 8.15% from its previous close of 8.16% on Thursday.