Bond yields trade lower on Tuesday

Bond yields traded lower on Tuesday despite the inflation accelerated and the local debt continued to see outflows ahead of the Fed Reserve’s interest rate decision. Besides, investors got some encouragement with the report of global rating agency Fitch stating that India will continue to post good growth despite subdued prospect for the Asia Pacific region amid an expected rise in US rates, dollar strength and lower commodity prices.

In the global market, Prices of U.S. Treasuries were down slightly in choppy trading on Monday as traders awaited a possible interest rate increase by the Federal Reserve this week that would be the first in more than nine years. Furthermore, U.S. crude oil prices fell in early Asian trade, resuming their decline after strong gains on Monday snapped a six-day losing streak, on concerns about a global glut and mild winter demand.

Back home, the yields on new 10 year Government Stock were trading 1 basis point lower at 7.80% from its previous close at 7.81% on Monday.

The benchmark five-year interest rates were trading 1 basis point higher at 7.80% from its previous close at 7.79% on Monday.

The Reserve Bank of India has announced the auction of 91-days and 182-days Government of India Treasury Bills for notified amount of Rs 8,000 crore and Rs 6,000 crore respectively. The auction will be conducted on December 16, 2015 using 'Multiple Price Auction' method.