Bond yields tread water in sync with US counterparts

In sync with US treasury yields, Indian bond yields were treading water as traders awaited RBI’s open market operation announcement.

On the global front, lack of cues from US markets on Monday made Treasury bond prices tread water in Asia on Tuesday, as investors waited to assess US market reaction to Spain's worsening debt situation. US markets were closed Monday for the Memorial Day holiday.

Back home, the Government of India after market hours on Monday announced the sale (re-issue) of four dated securities for Rs 15,000 crore, which includes (i) “8.19% Government Stock 2020” for a notified amount of Rs 4,000 crore (nominal) through price based auction, (ii) “9.15% Government Stock 2024” for a notified amount of Rs 7,000 crore (nominal) through price based auction (iii) “8.28% Government Stock 2032” for a notified amount of Rs 2,000 crore (nominal) through price based auction and (iii) “8.83% Government Stock 2041” for a notified amount of Rs 2,000 crore (nominal) through price based auction. The auctions will be conducted using uniform price method. The auctions will be conducted by the Reserve Bank of India, Fort, Mumbai on June 01, 2012 (Friday).

Meanwhile, Brent crude flattened out around $107 per barrel on Tuesday as investors weighed potential Middle East supply disruptions against a deepening debt crisis in the euro zone, which is expected to hamper the global fuel demand.

The yields on 10-year benchmark 8.79% - 2021 bonds were trading flat at its previous close of 8.51%.

The benchmark five-year interest rate swaps was trading at 7.46% from its previous close at 7.47%. 

The Reserve Bank of India has announced the auction of 91-day  and 364-day Government of India Treasury Bills for notified amount of  Rs 10,000 crore and Rs 5,000 crore respectively . The auction will be conducted on May 30, 2012 using 'Multiple Price Auction' method.