Bond yields edge higher ahead of Rs 20,000 crore bonds auction

Bond yields edged higher as traders cut positions bracing for the Rs 20,000 crore bond auction later in the session. Most bonds on offer are among the least traded, but select dealers are of the view that possibility of devolvement have reduced after a consistent selling spree over the last two sessions. On the global front, U.S. Treasuries prices fell on Wednesday as rising stocks reduced demand for lower risk government bonds, and as Federal Reserve Chair Janet Yellen expressed optimism on the economy. Meanwhile, brent oil steadied above $109 a barrel on Thursday, trading not far from a six-week high, as escalating tensions in Ukraine kept the geopolitical risk premium on crude prices intact, while an upbeat view on U.S. and Chinese demand was also supportive. Back home, the yields on new 10 year Government Stock 2023 were trading 3 basis points higher at 8.99% from its previous close of 8.96% on Wednesday. The benchmark five-year interest rate swaps were trading unchanged at its previous close of 8.51% on Wednesday. The Government of India has announced the sale (re-issue) of four dated securities for Rs 20,000 crore on April 17, 2014, including (i) 8.35% Government Stock 2022 for a notified amount of Rs 5000 crore, (ii) 8.24% Government Stock 2027 for a notified amount of Rs 9,000 crore, (iii) 9.20% Government Stock 2030 for a notified amount of Rs 3000 crore and lastly, (iv) 9.23% Government Stock 2043 for a notified amount of Rs 3000 crore respectively.