Bond yields tread water on Wednesday

Bond yields were trading steady, as investors stayed on the sidelines to evaluate cash liquidity in the system post RBI bought Rs 11,642 crore of bonds out of Rs 12,000 crore scheduled at its open market operation on Tuesday.

On the global front, US 10-year Treasuries prices were steady in Asian trade on Wednesday, as US fiscal talks dragged on. President Barack Obama proposed on Tuesday that tax rates could be lowered in 2013 with a broad US tax code overhaul, but maintained rates for the wealthiest must rise. Meanwhile, Brent crude edged above $110 a barrel on Wednesday, after two sessions of losses, as investors switched their focus from the United States fiscal crisis to hopes that growth in top energy consumer China to pick up sooner than expected.

The yields on 10-year 8.79% - 2021 were trading steady at its previous close of 8.17%.

The benchmark five-year interest rates were trading unchanged at its previous close of 7.13%

The Reserve Bank of India has announced the auction of 91-day and 182-day Government of India Treasury Bills for notified amount of Rs 5,000 crore each. The auction will be conducted on December 05, 2012 using 'Multiple Price Auction' method.

The Government of India have announced the sale (new/re-issue) of three dated securities for Rs 12,000 crore on December 07, 2012, which includes (i) “a new 8-Year Government Stock 2020” for a notified amount of Rs 4,000 crore (nominal) through yield based auction; (ii) “8.20 percent Government Stock 2025” for a notified amount of Rs 6,000 crore (nominal) through price based auction; and (iii) “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 December 07, 2012 (Friday).