Bond yields edge lower on caution ahead of Rs 16,000 crore debt sale on Friday

Bond yields were trading lower on prevailing caution ahead of this week's Rs 16,000 crore bond sale and the outcome of general elections next week, which whetted the appeal for safe haven instruments, vis-à-vis bonds. Additionaly, gains in rupee were also aiding bonds. On the currency front, Indian rupee, despite retreating from the psychological 60$ level, its highest since April 9, was trading stronger against dollar on Thursday, tracking gains in the domestic share market. However, losses in other Asian currencies and the dollar's gains versus the euro limited the further uptrend of Indian currency. On the global front, US Treasuries gained on Wednesday after America's top central banker said the world's largest economy remained on the mend but still required substantial monetary accommodation from Washington policymakers. Meanwhile, Brent crude, holding onto most of the gains from the previous session, hovered around $108 a barrel on Thursday as customs data showed a large jump in Chinese crude imports and a bigger than expected trade surplus in the world's second biggest oil user. Back home, the yields on new 10 year Government Stock 2023 were trading 1 basis point lower at 8.79% from its previous close of 8.80% on Wednesday. The benchmark five-year interest rate swaps was trading 3 basis points lower at 8.29% from its previous close of 8.32% on Wednesday. The Government of India announce the sale of Four dated securities for Rs 16,000 crore on May 9, 2014, including (i) 7.80% Government Stock 2020 for a notified amount of Rs 4,000 crore, (ii) 8.83% Government Stock 2023 for a notified amount of Rs 7,000 crore, (iii) 8.32% Government Stock 2032 for a notified amount of Rs 2,000 crore and lastly (iv) 8.30% Government Stock 2042 for a notified amount of Rs 3,000 crore on May 9, 2014.