Bond yields edged lower on RBI chief's comments

Bond yields edged lower after the central bank chief Raghuram Rajan, while speaking at the Institute for Indian Economic Studies in Tokyo, underscored that public inflation expectations have come down and are expected to be lower going further.  On the global front, US benchmark Treasury yields inched up from 11-month lows on Thursday as data showed the US economy shrank for the first time in three years in the first quarter but did not alter the view of a solid rebound this spring. Meanwhile, Brent futures held above $110 a barrel on Friday as a steep drawdown in US gasoline stockpiles revived hopes of steady demand growth in the world's top oil consumer, with geopolitical tensions over Ukraine providing additional support. Back home, the yields on new 10 year Government Stock 2023 were trading 5 basis points lower at 8.62% from its previous close of 8.67% on Thursday. The benchmark five-year interest rate swaps were trading 6 basis points lower at 8.07% from its previous close of 8.13% on Thursday. The Government of India have announced the sale of four dated securities for Rs 16,000 crore on May 30, 2014, including (i) 8.35% Government Stock 2022 for Rs 4000 crore, (ii) New 14 Year Government Stock for Rs 7000 crore, (iii) 9.20% Government Stock 2030 for Rs 2000 crore and (iv) 9.23% Government Stock 2043 for a notified amount of Rs 3000 crore.