Bond yields trade in narrow range ahead of Rs 16,000 crore debt sale

Bond yields edged higher as traders made room for upcoming Rs 16,000 crore debt sale on Friday. A sharp rise in yields, however, is likely to be averted on the back of a rally in US treasury prices on Thursday. Nevertheless, the yields are expected to trade in narrow range ahead of the release of factory output, later in the day which is expected to have risen at its fastest annual pace in five months

On the global front, US Treasuries market rallied with benchmark yields falling to their lowest levels in nearly four weeks as market-friendly minutes from the Federal Reserve's March policy meeting renewed appetite for government debt. Meanwhile, brent futures eased towards $107 a barrel on Friday as the global supply outlook improved with more Libyan supplies expected to reach the market, although growing tension between the West and Russia over Ukraine put a floor under prices.

The yields on new 10 year Government Stock 2023 were trading 1 basis points higher at 9.01% from its previous close of 9.00% on Thursday.

The benchmark five-year interest rate swaps were trading 1 basis point lower at 8.52% from its previous close of 8.53% on Thursday.

The government of India announced the sale of four dated securities for Rs 16,000 crore on April 11, 2014, which includes (i) 7.80% Government Stock 2020 for a notified amount of Rs 3,000, (ii) 8.83% Government Stock 2023 for a notified amount of Rs 8,000, (iii) 8.32% Government Stock 2032 for a notified amount of Rs 8.32% Government Stock 2032 of Rs 3,000 crore and lastly (iv) 8.30% Government Stock 2042 for a notified amount of Rs 2,000 crore on April 11,2014.