Bond yields were trading flat with positive bias on Wednesday

Bond yields were trading flat with a positive bias on Wednesday ahead of the outcome of the U.S. Federal Reserve policy meeting. However, bonds gained a tad bit as sentiment got a lift after RBI deputy governor underscored that the country could do more buyback. He also said the central bank is in dialogue with the government on the auctioning of cash balances and it would happen soon.

The government has budgeted gilt buyback worth Rs 50,000 crore for this year. While, the first tranche of Rs 20,000 crore has been auctioned, the RBI accepted bids worth only Rs 12,761.46 crore.

The Reserve Bank will conduct overnight repo variable rate auction for a notified amount of Rs 20,000 crore today (September 16, 2014, Tuesday). The auction will be conducted between 3.00 PM and 3.30 PM as per the revised guidelines on Term Repo Auctions issued on February 13, 2014.

On the global front, U.S. Treasury debt prices inched up on Tuesday as investors in global markets throttled down fears that Federal Reserve policymakers meeting in Washington will soon undo America's ultra loose monetary policy. Meanwhile, brent crude steadied around $99 per barrel after briefly hitting an intraday high of $99.09, on hopes the Organization of the Petroleum Exporting Countries (OPEC) will cut output and reduce a global supply glut.

Back home, the yields on new benchmark 8.40%- 2024 bonds were trading 1 basis point lower at 8.49% from its previous close of 8.50% on Tuesday.

The benchmark five-year interest rate swaps were trading steady at its Tuesday’s close of 7.95%.

The Reserve Bank of India has announced the auction of 91 and 364 days Government of India Treasury Bills for notified amount of Rs 7000 and Rs 5000 crore respectively. The auction will be conducted on September 17, 2014 using 'Multiple Price Auction' method.

The Government of India have announced the sale (re-issue) of four dated securities for Rs 12,000 crore on September 19, 2014, including (i) 8.27% Government Stock 2020 for a notified amount of Rs 2000 crore, (ii) 8.40% Government Stock 2024 for a notified amount of Rs 6000 crore, (iii) 8.32% Government Stock 2032 for a notified amount of Rs 2000 crore and lastly (iv) 9.23% Government Stock 2043 for a notified amount of Rs 2000 crore respectively.