Bond yields trade lower after 3 month low May CPI, 13 month April IIP data

Bond yields were trading lower after data on Thursday showed Consumer Price Inflation (CPI) cooled to a three-month low of 8.28 percent in May and industrial growth rebounded to 13 months high, in a sign of economy revival that could offset the threat of patchy summer rains. However, further gains in bonds were capped after global oil prices jumped to nine-month high on Thursday, as concerns mounted that escalating violence in Iraq could disrupt oil supplies.

On the global front, US Treasury debt prices rallied on Thursday after a robust auction of 30-year bonds somewhat eased concerns about fading demand for long-term government paper. Meanwhile, Brent crude climbed to a nine-month high near $114 a barrel on Friday, as supply disruption fears took centre stage after the United States threatened military action in Iraq against Sunni Islamist militants who are pushing on towards Baghdad

Back home, the yields on new 10 year Government Stock 2023 were trading lower by 2 basis points at 8.53% from its previous close of 8.55% on Thursday. 

The benchmark five-year interest rate swaps were trading 5 basis points lower at 7.75% from its previous close of 7.80% on Thursday.