MUMBAI: Government bond yields were near two-week lows on Wednesday, helped by a drop in US Treasury yields overnight but dealers said trading
would be in a narrow range ahead of debt supplies this week.
At 9:22 a.m. (0352 GMT), the yield on the 10-year benchmark bond was at 7.27 per cent, after falling to 7.26 per cent matching the low touched in the previous session, its lowest since Nov 5. It had ended at 7.28 per cent on Tuesday.
Volumes were low at 19.2 billion rupees ($415.6 million) on the central bank's trading platform. "Trading today would be flat to bullish but Friday's auction should provide some direction," said a senior trader at a foreign bank.
US Treasury debt prices edged higher on Tuesday, pushing 30-year yields to two-week lows, benefitting from a weaker-than-expected report on U.S. industrial production.
India's central bank will auction 70 billion rupees of treasury bills on Wednesday, ahead of a 100 billion rupees bonds sale on Friday. Traders said the bond sale was likely to be well bid as there was no auction scheduled in the coming week. The benchmark five-year interest rate swap was at 6.63/66 per cent from its previous close of 6.65/68.
