Bonds recovering from two months low level hit on Monday, edged up on value buying and short-covering activities, with gains in U.S. Treasury debt prices also aiding the sentiment to some extent. The yields had risen to two month high levels in previous trading session as fears over military tensions in Ukraine hit emerging markets and sent global crude prices surging, thereby raising concerns about imported inflation.
However, sentiment remains subdued ahead of February trade data, which is due to be released later in the noon, amidst concerns about liquidity conditions ahead of excise and service tax outflows in mid-March.
On the global front, U.S. Treasury 10-year yield fell to 2.5920 percent, its lowest since Feb 4, as Russia's military intervention in Ukraine boosted demand for safe-haven investments. Meanwhile, Brent crude held above $111 on Tuesday, at its highest levels since the end of last year, as tensions over Russia's military intervention in Ukraine rattled global markets and stoked fears of energy supply disruption to Europe.
The yields on new 10 year Government Stock 2023 were trading 2 basis points lower at 8.88% from its previous close of 8.90% on Monday.
The benchmark five-year interest rate swaps were trading 2 basis points lower at 8.56% from its previous close of 8.58% on Monday.
The Reserve Bank of India has announced the auction of 91-days and 364 days Government of India Treasury Bills for notified amount of Rs 8,000 crore and Rs 6000 crore respectively. The auction will be conducted on March 05, 2014 using 'Multiple Price Auction' method
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