Bond yields edge down on ample cash
Thursday, 8 April 2010
MUMBAI, Apr 7 (Reuters): Federal bond yields edged down in early trade Wednesday as ample cash conditions supported the market demand for debt but traders were wary of adding larger positions ahead of Friday's bond sale.
At 9:09 am, the 10-year benchmark bond yield was at 7.79 per cent, after easing to 7.78 per cent, below Tuesday's close of 7.80 per cent. Last week, it had fallen to 7.71 per cent, its lowest since Feb 9.
Dealers said they expect the 10-year benchmark bond yield to trade in the range of 7.78-83 per cent during the day.
Cash levels in the banking system rose Tuesday as banks parked 961.60 billion rupees in the central bank's reverse repo window Tuesday, the most in almost two months.
The results of the bond auction will also be closely watched by the market as the government kicks off its 2010/11 borrowing programme with a 120 billion rupees bond auction Friday.
The central bank is also due to auction 90 billion rupees of treasury bills later Wednesday.
US Treasury prices rose Tuesday as a recent spike in yields attracted bargain-hunters and renewed worries of Greece's fiscal problems rekindled a safety bid for bonds.
At 9:09 am, the 10-year benchmark bond yield was at 7.79 per cent, after easing to 7.78 per cent, below Tuesday's close of 7.80 per cent. Last week, it had fallen to 7.71 per cent, its lowest since Feb 9.
Dealers said they expect the 10-year benchmark bond yield to trade in the range of 7.78-83 per cent during the day.
Cash levels in the banking system rose Tuesday as banks parked 961.60 billion rupees in the central bank's reverse repo window Tuesday, the most in almost two months.
The results of the bond auction will also be closely watched by the market as the government kicks off its 2010/11 borrowing programme with a 120 billion rupees bond auction Friday.
The central bank is also due to auction 90 billion rupees of treasury bills later Wednesday.
US Treasury prices rose Tuesday as a recent spike in yields attracted bargain-hunters and renewed worries of Greece's fiscal problems rekindled a safety bid for bonds.