Bond yields edge lower on short-covering; WPI data eyed

Bond yields were trading lower on short-covering after yields rose 5 bps on Tuesday, a day before holiday. Now, dealers wait for WPI inflation data, which is due to be released later in the session and which could provide clues on RBI’s stance in its upcoming monetary policy on June 3, 2014 On the global front, US Treasuries yields fell to six-month lows on Wednesday, breaking out of a recent range, as expectations the European Central Bank will cut interest rates sparked a global fixed-income rally. Meanwhile, Brent crude held steady above $110 a barrel on Thursday, close to its highest in nearly three weeks, as on-going concerns over the crisis in Ukraine outweighed mixed U.S. oil inventory data. Back home, the yields on new 10 year Government Stock 2023 were trading 2 basis points lower at 8.76% from its previous close of 8.78% on Tuesday The benchmark five-year interest rate swaps was trading 4 basis points lower at 8.23% from its previous close of 8.27% on Tuesday. The Government of India announce the sale of four dated securities for Rs 20,000 crore to be held on May 16, 2014, including (i) 8.35% Government Stock 2022 for a notified amount of Rs 6000 crore, (ii) 8.24% Government Stock 2027 for a notified amount of Rs 8,000 crore, (iii) 9.20% Government Stock 2030 for a notified amount of Rs 3,000 and (iv) 9.23% Government Stock 2043 for a notified amount of Rs 3000 crore.