Bond yields ebb to 13-month low level on Thursday

Bond yields were trading near 13-month low level on Thursday as drop in retail and wholesale price inflation data released earlier this week continued to cheer sentiment. On the macro-front, India's main inflation gauge, based on monthly WPI, easing at 33 month low, stood at 2.78% for the month of September as compared to 3.74% in the previous month and 7.05% during the corresponding month of the previous year, while consumer inflation slowed to its lowest on record low level of 6.46% in September.

On the global front, U.S. Treasury prices were little changed in Asian trade on Thursday, with the market awaiting more data after weak U.S. economic indicators overnight triggered a broad selloff on Wall Street and sent benchmark yields tumbling to 17-month lows. Meanwhile, brent crude fell to near four-year lows on Thursday and U.S. oil lost more than a dollar as growing concerns over the global economy stretched a four-month rout

Back home, the yields on new benchmark 8.40%- 2024 bonds were trading 4 basis points lower at 8.36% from its previous close of 8.40% on Tuesday.

The benchmark five-year interest rate swaps were trading 9 basis points lower at 7.48% from its previous close of 7.57% on Tuesday.

The government of India has announced sale of four dated securities of Rs 15,000 crore on October 17, including (i) 8.27% Government Stock 2020 for a notified amount of Rs 2000 crore, (ii) 8.60% Government Stock 2028 for a notified amount of Rs 7000 crore, (iii) 8.32% Government Stock 2032 for a notified amount of Rs 3000 crore and lastly, (iv) 8.30% Government Stock 2042 for a notified amount of Rs 3000 crore respectively. The auctions will be conducted using multiple price method. Up to 5% of the notified amount of the sale of the stocks will be allotted to eligible individuals and Institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.