Bond yields tread water in absence of fresh trigger

Bond yields were treading water as market-men looked for fresh triggers to initiate any position. After the release of manufacturing activity data, which slowed to nine months low, the market focus now turns to industrial output data for cues going into RBI's mid-quarterly policy review on September 17.

On the global front, US treasuries prices succumbed to profit taking in Asian trade following Federal Reserve Chairman Ben Bernanke's speech on Friday, which fuelled speculations of further stimulus measures later this month. Meanwhile, US crude futures edged up to one-week highs on Tuesday, supported by hopes central banks would act soon to revive the global economy.

The yields on 10-year benchmark 8.79% - 2021 were trading steady at its previous close of 8.22%.

The benchmark five-year interest rates edged 1 basis point higher at 7.17% from its previous close of 7.16%.

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 7,000 crore and Rs 5,000 crore respectively. The auction will be conducted on September 5, 2012 using 'Multiple Price Auction' method.

The Government of India have announced the sale (re-issue) of four dated securities for  Rs 16,000 crore on September 7, 2012, which include (i) ‘8.07 percent Government Stock 2017-JUL’ for a notified amount of  Rs 4,000 crore (nominal) through price based auction; (ii) ‘8.15 percent Government Stock 2022’ for a notified amount of  Rs 7,000 crore (nominal) through price based auction; (iii) ‘8.97 percent Government Stock 2030’ for a notified amount of  Rs 3,000 crore (nominal) through price based auction; and (iv) ‘8.33 percent Government Stock 2036’ 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, Mumbai Office, Fort, Mumbai on September 07, 2012 (Friday).