Bond yields edge lower on Wednesday

Bond yields edged lower on Wednesday as investors sentiment got some support with the report that the current account deficit (CAD) narrowed to 1.6 percent of GDP at $ 8.2 billion in the second quarter ended September, compared to $10.9 billion or 2.2 per cent of GDP reported in the same period last year, mainly due to lower trade deficit. However, some investors deferred purchases ahead of holidays and the weekend, amid lingering concerns over the federal government's fiscal consolidation plans.

In the global market, U.S. Treasury yields rose on Tuesday after a final reading of U.S. third-quarter economic growth came in stronger than expected, reinforcing the view that the Federal Reserve would proceed with a steady pace of interest rate increases next year. Furthermore, U.S. crude oil prices have moved into a premium over internationally traded Brent as an unexpected drop in American inventories tightened the system, while global markets still suffer from ballooning oversupply.

Back home, the yields on new 10 year Government Stock were trading 1 basis point lower at 7.75% from its previous close at 7.76% on Tuesday.

The benchmark five-year interest rates were trading 2 basis points lower at 7.74% from its previous close at 7.76% on Tuesday.

The Reserve Bank of India has announced the auction of 91-days and 364-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 23, 2015 using 'Multiple Price Auction' method.