Bond yields tread water ahead of Rs 8,000 crore reverse repo auction

Bond yields were trading steady on Wednesday as traders preferred being on the sidelines ahead of Rs 8000 crore reverse repo auction later in the day. Further, prevailing caution ahead of RBI’s monetary policy on September 30, 2014, also weighed on the sentiment.

Meanwhile, the Reserve Bank will conduct a one day reverse repo variable rate auction for a notified amount of Rs 8,000 crore on September 24, 2014, Wednesday. 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. benchmark and long-dated Treasuries yields slipped to their lowest since September 11 on Tuesday after weak European economic data raised concerns about global growth and U.S. strikes in Syria spurred safe-haven bids. Meanwhile, brent crude, slipping further below $97 a barrel, fell for a third day on Wednesday as inflated supplies and weak economic data from Europe outweighed rising geopolitical tensions in the Middle East.

Back home, the yields on new benchmark 8.40%- 2024 bonds were trading steady at its Tuesday’s close of 8.47%.

The benchmark five-year interest rate swaps were trading 1 basis point higher at 7.84% from its previous close of 7.83% on Tuesday.

The Reserve Bank of India has announced the auction of 91 and 182 days Government of India Treasury Bills for notified amount of Rs 7,000 crore and Rs 5,000 crore respectively. The auction will be conducted on September 24, 2014 using 'Multiple Price Auction' method. 

The Government of India have announce the sale of Four dated securities for Rs 12,000 crore on September 26, 2014, including (i) 8.27% Government Stock 2020 for a notified amount of Rs 2,000 crore, (ii) 8.60% Government Stock 2028 for a notified amount of Rs 6,000 crore, (iii) 9.20% Government Stock 2030 for a notified amount of Rs 2,000 crore and lastly (iv) 8.30% Government Stock 2042 for a notified amount of Rs 2,000 crore.

The Reserve Bank will conduct a one day reverse repo variable rate auction for a notified amount of Rs 8,000 crore on September 24, 2014. 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.