Bond yields edge higher tracing soaring Brent crude prices

Bond yields edged tracing the rise in crude oil prices, which stoke domestic inflation fears, thereby further dashing expectations of a rate cut in RBI’s upcoming mid-quarterly policy review on September 17, 2012. Bond yields also edged up as investor’s made some room for Rs 15,000 crore on August 17, 2012.

On the global front, US 10-year Treasuries yields edged higher in Asia on Thursday, to a fresh 3-month high as stronger than expected US industrial production data sapped the demand for safe-haven US government debt. Meanwhile, Brent crude gyrating around three-month high level was trading above $116 mark on supply disruptions concerns from the Middle East and a steeper-than-expected drawdown in oil stocks in the world's top consumer, the United States (US).

The yields on 10-year benchmark 8.79% - 2021 edged 2 basis points higher at 8.24% from its previous close of 8.22% on Wednesday.

The benchmark five-year interest rates rose 5 basis points at 7.14% from its previous close of 6.99% on Wednesday.

The Government of India have announced the sale (re-issue) of  four dated securities for Rs, which includes (i) “8.19 percent Government Stock 2020” for a notified amount of Rs 4,000 crore (nominal) through price based auction; (ii) “8.33 percent Government Stock 2026” for a notified amount of  Rs 7,000 crore (nominal) through price based auction; (iii) “8.28 percent Government Stock 2032” for a notified amount of  Rs 2,000 crore (nominal) through price based auction; and (iv) “8.83 percent 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 August 17, 2012 (Friday).