Bond yields tread water on Friday; caution ahead of Rs 14,000 crore debt sale weighs

Bond yields were treading water on Friday in account of prevailing cautiousness ahead of central bank's monetary policy review on December 2, nevertheless the uptrend of yields is likely as traders could reduce their position ahead of Rs 14,000 crore debt sale later in the day. On the global front, U.S. Treasury debt prices inched higher on Thursday as investors sought the safety of government bonds amid concerns about global growth following weak manufacturing data from China and Europe. Meanwhile, brent crude briefly rose to $80 a barrel on Friday on speculation OPEC could agree to output cuts at its meeting next week, with strong U.S. economic data also bolstering oil prices. Back home, the yields on new benchmark 8.40%-2024 bonds was trading flat at Thursday’s close of 8.16%. The benchmark five-year interest rate swaps were trading 1 basis point higher at 7.36% from its previous close of 7.35% on Thursday. The Government of India announce the sale of Four dated securities for Rs 14,000 crore on November 21, 2014, including (i) 8.27% Government Stock 2020 for a notified amount of Rs 2000 crore, (ii) New 12 year Government Stock for a notified amount of Rs 6,000 crore, (iii) 8.24% Government Stock 2033 for a notified amount of Rs 3000 crore and (iv) 8.30% Government Stock 2040 for a notified amount of Rs 3000 crore respectively.