Bond yields edge higher in thin trade on Monday

Bond yields rose a tad high in thin trade on Monday. However, upside of the bond yields stayed limited on hopes that the central bank will be prompted to lower rates after the government showed an inclination towards fiscal discipline.

On the global front, US 10-year yield hovered near a three-week low in Asia on Monday, as weakness in equities helped support demand for safe haven debt. Meanwhile, Brent crude fell below $112 per barrel on Monday, reflecting investor concerns a shaky global economy may hurt oil demand following fresh evidence of weakness in China and Japan as well as persistent worries about the debt-saddled euro zone.

The yields on 10-year benchmark 8.79% - 2021 were trading up by 1 basis point at 8.16% from its previous close of 8.15%.

The benchmark five-year interest rates edged lower by 3 basis points at 7.02% from its previous close of 7.05%.

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 5,000 crore and Rs 5,000 crore respectively. The auction will be conducted on October 03, 2012 using 'Multiple Price Auction' method.