The yields on 10-year 8.79% - 2021 bonds rose a little higher at 7.87% from its previous close of 7.86% on Monday
Pre IIP and CPI data Scenario:
Bond yields were treading water in early deals as investors’ awaited December factory output data for near-term direction, given that US treasuries were also little changed in Asian trade.
On the global front, US Treasuries were little changed in Asian trade on Tuesday, sticking to their familiar ranges and showing no reaction to the news that North Korea has likely conducted a nuclear test. Meanwhile, Brent crude futures held above $118 a barrel on Tuesday in thin trade due to Lunar New Year holidays in Asia and awaiting weekly data on US oil stocks.
Back home, the yields on 10-year 8.79% - 2021 bonds were trading steady at its previous close of 7.86% on Monday.
The benchmark five-year interest rate swaps were trading 1 basis point lower at 7.25% from its previous close of 7.26% on Monday.
The Government of India have announced the sale (re-issue) of three dated securities for Rs 12,000 crore (i) “8.12 percent Government Stock 2020” for a notified amount of Rs 3,000 crore (nominal) through price based auction; (ii) “8.20 percent Government Stock 2025” for a notified amount of Rs 6,000 crore (nominal) through price based auction; and (iii) “8.30 percent Government Stock 2042” for a notified amount of Rs 3,000 crore (nominal) through price based auction. The auctions will be conducted using multiple price method. The auctions will be conducted by the Reserve Bank of India, Fort, Mumbai on February 15, 2013 (Friday).
The Reserve Bank of India has announced the auction of 182-day and 91-day Government of India Treasury Bills for notified amount of Rs 5,000 crore. The auction will be conducted on February 13, 2013 using ‘Multiple Price Auction’ method.
Post IIP and CPI data Scenario:
Bond yields rose a tad from the previous close after higher January CPI data counterbalanced a contraction in industrial output, which had piled up some more pressure on the Reserve Bank of India (RBI) to cut its policy rate by a further 25 basis points, in its next policy review on March 19. Apex Bank, caving into growing clamour for a rate cut, in ‘Third Quarter Review of Monetary Policy 2012-13’, went ahead and slashed repo rate by 25 basis points to 7.75 per cent against 8 per cent earlier and reduced cash reserve ratio (CRR) of scheduled banks by 25 basis points from 4.25 per cent to 4.0 per cent of their net demand and time liabilities (NDTL).
The yields on 10-year 8.79% - 2021 bonds rose a little higher to 7.87% from its previous close of 7.86% on Monday.
Extending a period of gloom in Asia's-third largest economy, India's annual industrial output growth measured by index of industrial production (IIP), contracted by 0.6% at 179.3 for the month of December 2012 against contraction of 0.1%, later revised to -0.8%, in the previous month.
In yet another disappointment for the street after IIP numbers, annual rate of inflation, based on the consumer prices index (CPI) in India, crept higher in the month of January at 10.79%. According to the data released, provisional annual inflation rate based on all India general CPI (Combined) for January 2013 on point to point basis stood at 10.79% as compared to 10.56% for the previous month of December 2012. However,the two sets of data keeps prospects of a RBI rate cut in March uncertain as economic growth is slowing down even as inflation stays persistently high.
No comments:
Post a Comment