Bond yields tread water ahead of Rs 15,000 core debt sale

The yields on 10-year 8.79% - 2021 bonds were trading 1 basis point lower at 7.37% from its previous close of 7.38% on Thursday

Bond yields were treading water ahead of Rs 15,000 crore debt sale later in the day, wherein, good demand is expected. On the global front, US Treasury debt prices rose on Thursday after the Treasury saw solid demand for new inflation-linked bonds, though benchmark yields held above 2 percent as traders worried about how high yields might rise whenever the US Federal Reserve decides to taper its bond purchases. Meanwhile, Brent crude oil prices retraced earlier losses after falling to a three-week low on Thursday in a broader commodities selloff, riding the coattails of a late turnaround in US equities to end flat.

Back home, the yields on 10-year 8.79% - 2021 bonds were trading 1 basis point lower at 7.37% from its previous close of 7.38% on Thursday, while the new 10-year paper is trading 2 basis point lower at 7.13% against its previous close.

The benchmark five-year interest rate swaps were trading steady at its previous close of 6.78% on Thursday.

The Government of India have announced the sale (re-issue) of four dated securities for  Rs 15,000 crore on May 24, 2013  (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;(iii) “8.32 percent Government Stock 2032” for a notified amount of  Rs 3,000 crore (nominal) through price based auction, and (iv) “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 May 24, 2013 (Friday).

Call rates edge lower; realigns with new repo rate

The overnight borrowing rates touched a high and low of 7.70% and 7.50% respectively

Interbank call rates were trading lower at 7.60/7.65% against its previous close of 7.60/7.70%, following a cut in the central bank's key lending rate to 7.50% from 7.75%. Call rates are expected to ease further in April once government spending picks up. Further, Reserve Bank of India (RBI) in its Mid-Quarter Monetary Policy Review: March 2013, has exuded its commitment towards actively managing liquidity through various instruments, including open market operations (OMO), so as to ensure adequate flow of credit to productive sectors of the economy.

Meanwhile, RBI, to support an economy set for its slowest growth in a decade, in a much anticipated move, slashed its repo rate by 25 basis points at 7.50% against 7.75% earlier and left its Cash Reserve Ratio (CRR) unchanged at 4%. Consequently, reverse repo rate under the LAF, determined with a spread of 100 basis points below the repo rate, now stands adjusted to 6.50% with immediate effect.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 130,840 crore through repo window on March 20, 2013, while banks using special LAF facility borrowed Rs 120,385 crore through repo window and parked Rs 65 crore via reverse repo window on March 19, 2013.

The overnight borrowing rates touched a high and low of 7.70% and 7.50% respectively.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 7.67% on Wednesday and total volume stood at Rs 21,354.87 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 7.53% on Wednesday and total volume stood at Rs 12,656.60 crore, so far.

The indicative call rates which closed at 7.60/70% on Tuesday were contributions made from Andhra Bank, AXIS Bank, Bank of America, Bank of Baroda, Bank of India, Canara Bank, J P Morgan Chase, Citibank N.A., Corporation Bank, Credit Agricole Bank, Indusind Bank, ICICI Bank, ICICI Securities, IDBI Bank, Jammu and Kashmir Bank, Punjab National Bank, RBS, Societe Generale, Standard Chartered, so far.

Bond yields edge tad higher on account of heavy sale of debt by PSU banks

The yields on 10-year 8.79% - 2021 bonds were trading 1 basis point higher at 7.85% from its previous close of 7.84% on Friday

Bond yields edged tad higher following heavy sales of debt by state run banks on Friday. Further, cautiousness ahead of key inflation and factory output data, which will set the tone for March 19 policy, also influenced the trading sentiment. Meanwhile, state-run banks that were heavy buyers of government debt for most of the last week, sold Rs 2,118 crore of debt on Friday.

On the global front, US 10-year Treasury yield edged higher in Asian trade on Monday and hovered within range of an 11-month high hit on Friday after data showed US job growth picked up more than expected in February. US employers added a greater-than-expected 236,000 workers to their payrolls in February and the jobless rate fell to a four-year low, offering a bright signal on the economy's health. Meanwhile, Brent futures slipped further sub psychological $111 on Monday on demand growth concerns as latest data from China pointed to an uneven economic recovery in the world's second-biggest oil consumer, with a stronger dollar putting additional pressure on prices.

Back home, the yields on 10-year 8.79% - 2021 bonds were trading 1 basis point higher at 7.85% from its previous close of 7.84% on Friday.

The benchmark five-year interest rate swaps were trading unchanged from its previous close of 7.56% on Friday.

Bond yields tread water ahead of Economic Survey

The yields on 10-year 8.79% - 2021 bonds were trading down by 1 basis point at 7.81% from its previous close of 7.82%

Bond yields were treading water with bond dealers looking for cues from the government's economic survey report due to be released in the afternoon. Further, caution was also witnessed ahead of the much awaited Union Budget, where the dealers await the fiscal deficit target and gross borrowing numbers for the next financial year starting in April.

On the global front, US Treasuries firmed in Asian trade, on Wednesday on political deadlock in Italy triggered by inconclusive elections and after Federal Reserve Chairman Ben Bernanke reaffirmed the central bank's commitment to monetary stimulus. Meanwhile, Brent crude oil, which fell under $113 a barrel on Tuesday as inconclusive Italian election results revived investor concerns about instability in the euro zone and about future demand for fuel, was now trading above $113.

Back home, the yields on 10-year 8.79% - 2021 bonds were trading down by 1 basis point at 7.81% from its previous close of 7.82%.

The benchmark five-year interest rate swaps were trading unmoved at its previous close of 7.19% on Tuesday.

Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank has decided to conduct Open Market Operations by purchasing the government securities for an aggregate amount of Rs 10,000 crore on March 1, 2013 through multi-security auction using the multiple price method.

Bond yields trade lower after RBI unveils another round of OMO

Bond yields were treading lower after RBI unveiled another round of bond purchase to ease the tight cash condition. Further, the yields also edged lower on the back of a global risk-off due to Italy’s parliament deadlock.

Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank has decided to conduct Open Market Operations by purchasing the government securities for an aggregate amount of Rs 10,000 crore on March 1, 2013 through multi-security auction using the multiple price method.

On the global front, US Treasury debt prices rose and benchmark yields dipped to the lowest in a month on Monday with safe-haven demand as Italian exit polls reflected uncertainty over whether the country would be able to form a stable government. Meanwhile, Brent crude futures fell by more than a dollar to one-month lows below $114 a barrel on Tuesday as a potential political vacuum in Italy revived worries over instability in the debt-plagued euro zone

Back home, the yields on 10-year 8.79% - 2021 bonds were trading down by 1 basis point at 7.79% from its previous close of 7.80%.

The benchmark five-year interest rate swaps were trading lower by 4 basis points at 7.85% from its previous close of 7.89%.

Bond yields tread water ahead of Budget

The yields on 10-year 8.79% - 2021 bonds were trading steady at its previous close of 7.80% on Friday 

Bond yields were treading water as investors preferred staying on the sidelines ahead of the budget on Feb 28. However, traders will also watch the railway budget on Feb 26 for cues on how serious the government is about mending its finances.

On the global front, US Treasuries prices edged higher on Friday in the absence of key US economic data, as investors prepared for testimony next week from Federal Reserve Chairman Ben Bernanke, which will be scoured for clues of when the central bank may slow or stop buying bonds. Meanwhile, Brent crude was off 7 cents at $114.03, also ending last week with its biggest loss since early December.

Back home, the yields on 10-year 8.79% - 2021 bonds were trading steady at its previous close of 7.80% on Friday.

The benchmark five-year interest rate swaps were trading flat at its previous close of 7.22% on Friday.

Call rates inch up at start of new reserves reporting week

Interbank call rates were trading higher at 7.85/90% from its previous close of 7.75/80% since demand edged higher at the start of a new reserves reporting week. The call rates ended at 7.80/85% on Saturday.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 74,140 crore through repo window on February 22, 2013, while banks using special LAF facility borrowed Rs 74,220 crore through repo window and parked Rs 365 crore via reverse repo window on February 22, 2013.

The overnight borrowing rates touched a high and low of 7.95% and 7.85% respectively.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 7.87% on Monday and total volume stood at Rs 24,470.27 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 7.75% on Monday and total volume stood at Rs 24,185.75 crore, so far.

The indicative call rates which closed at 7.80/85% on Saturday were contributions made from Andhra Bank, AXIS Bank, Bank of America, Bank of Baroda, Bank of India, Canara Bank, J P Morgan Chase, Citibank N.A., Corporation Bank, Credit Agricole Bank, Indusind Bank, ICICI Bank, ICICI Securities, IDBI Bank, Jammu and Kashmir Bank, Punjab National Bank, RBS, Societe Generale, Standard Chartered, so far.

Bond yields edge tad lower as traders await budget 2013-14

The yields on 10-year 8.79% - 2021 bonds were trading steady at its previous close at 7.81% on Thursday

Bond yields edged tad lower as traders preferred to stay on the sidelines ahead of the budget on February 28, a crucial test of the government’s commitment to fiscal responsibility. However, lower crude oil prices may push up prices later in the session.

On the global front, US 10-year Treasuries slipped on Friday, giving back some of the gains made the previous day, when bonds rose on worries about Europe's economic outlook and data pointing to a tepid US recovery. Meanwhile, Brent crude rebounded above $114 a barrel on Friday but stayed on track for its largest weekly loss since early December, as investors focused on a debate in the United States on when it would pull a plug on its stimulus programme.

Back home, the yields on 10-year 8.79% - 2021 bonds were trading steady at its previous close at 7.81% on Thursday.

The benchmark five-year interest rate swaps were trading 1 basis point lower at 7.23% from its previous close of 7.24% on Thursday.

Bond yields tad lower on Thursday; downside limited in absence of any OMO announcement

Bond yields edged tad lower on the back of strong demand at the foreign institutional investor debt limit sale. India's auction of quotas allowing foreign investors to buy bonds enticed robust demand, reflecting expectations that the central bank will cut interest rates and that the government will deliver a fiscally disciplined budget. However, absence of an open market operation announcement so far this week has limited any sharp downside to yields.

Meanwhile, the auction attracted Rs 78,177 crore worth of orders for its debt auction limits, which gives foreign investors the right to invest in debt up to the limit bought. On the global front, US 10-year Treasuries inched higher in Asian trade on Thursday, but its gains were limited as weakness in equities stirred some safe haven bids for bonds. Meanwhile, oil extended losses for a second session on Thursday, with Brent slipping toward $115 a barrel after market rumours that a hedge fund was forced to liquidate substantial commodity positions led to the fuel's largest daily fall in 2013 the previous day.

Back home, the yields on 10-year 8.79% - 2021 bonds were trading lower by 1 basis point at 7.79% from its previous close of 7.80% on Wednesday.

The benchmark five-year interest rate swaps were trading 1 basis point lower at 7.25% from its previous close of 7.26% on Wednesday.

PFC TAX FREE BONDS...ISSUE OPENS FOR INVESTORS

Issue Opens 14/12/2012
Issuer	Power Finance Corporation Limited (PFC)
Issue Size	Rs. 100 cr. with an option to retain oversubscription of upto Rs. 3890.25 cr.
In-strument	Secured Tax-Free Redeemable Non-Convertible Non-Cumulative Bonds
Tax Benefits	The income by way of interest will be entitled to exemption from income tax under section 10 (15) (iv) (h) of Income Tax Act, 1961
Instrument Form	Both in Physical & dematerialized form
Security	Pari-passu first charge over the infrastructure assets of the Company
Credit Rating	“Crisil AAA” by CRISIL, "ICRA AAA" by ICRA
Face Value/ Issue Price	Rs. 1,000/- Per Bond
Minimum Subscription	5 Bond (Rs. 5,000/-) and in multiples of 1 Bond (Rs. 1,000/-) thereafter
Option	Option –I		Option –II
Tenure	10 Years		15 Years
Put & Call Option	None		None
Maturity/ Redemption	At par on the expiry of 10th Year from the Deemed Date of Allotment		At par on the expiry of 15th Year from the Deemed Date of Allotment
Coupon Rate	6.88%p.a.		7.04%p.a.
Additional Coupon Rate for Retail Category *	0.50% p.a		0.50%p.a
Coupon For Retail	7.38%		7.54%
Listing	Bombay Stock Exchange (BSE)
Issue Opens	18/02/2013	Issues Closes		15/03/2013
·         Retail Category: - Individual investor investing Rs.5000/- to Rs.10, 00,000/-(both inclusive).
·         Allotment on First Cum first basis.

Bond yields trade higher on Monday

The yields on 10-year 8.79% - 2021 bonds were trading 2 basis points higher at 7.85% from its previous close of 7.83% on Monday

Bond yields were almost trading higher on the RBI chief's comments about there being limited room for monetary easing. The Reserve Bank of India’s Chief Duvvuri Subbarao struck a hawkish note on Feb 16 and said there are upside risks to inflation from food and commodity prices, while room for monetary easing is limited.

On the global front, US Treasuries prices slid on Friday on brighter outlooks from consumers, with investors turning to fiscal talks in Washington as a slate of budget cuts looms. Meanwhile, Brent crude rose slightly toward $118 a barrel on Monday, underpinned by expectations of improving global growth despite some weak US data dampening prices at the end of last week. Tensions in the Middle East also lent support.

Back home, the yields on 10-year 8.79% - 2021 bonds were trading 2 basis points higher at 7.85% from its previous close of 7.83% on Monday.

The benchmark five-year interest rate swaps were trading 2 basis points higher at 7.26% from its previous close of 7.24% on Monday.

Eight State Governments have offered to sell dated securities by way of auction for an aggregate amount of Rs 7,070 crore (Face Value) on February 18, 2013.

The Reserve Bank of India has announced the auction of 91-day and 364-day Government of India Treasury Bills for notified amount of Rs 5,000 crore each respectively. The auction will be conducted on February 20, 2013 using 'Multiple Price Auction' method.

Bond yields trade steady; RBI’s OMO purchase eyed

The yields on 10-year 8.79% - 2021 bonds were trading 1 basis point lower at 7.81% from its previous close of 7.82% on Thursday

Bond yields were almost trading steady at its previous close as dealers awaited to watch Rs 15,000 crore bond auction and RBI's OMO purchase during the session.

Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank has decided to conduct Open Market Operations by purchasing the government securities for an aggregate amount of  Rs 10,000 crore on February 15, 2013.

On the global front, US Treasuries prices rose in Asian trade on Friday, extending gains from the previous day following disappointing growth data from the euro zone and a strong result at a 30-year bond auction. Meanwhile, Brent crude was steady at around $118 per barrel on Friday, after disappointing euro zone data revived concerns about the troubled region.

Back home, the yields on 10-year 8.79% - 2021 bonds were trading 1 basis point lower at 7.81% from its previous close of 7.82% on Thursday.

The benchmark five-year interest rate swaps were trading steady at its previous close of 7.24% on Thursday.

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).  

Eight State Governments have offered to sell dated securities by way of auction for an aggregate amount of Rs 7,070 crore (Face Value) on February 18, 2013.

Bond yields recede after January Inflation cools down to 4 year low

Pre WPI data Scenario: 

Bond yields were treading a bit higher as traders awaited inflation data for immediate cues. Street expected India's main inflation gauge, to rise an annual 7 percent, slower than an annual rise of 7.18 percent in December.

On the global front, Prices of US Treasuries slid on Wednesday after a tepid sale of 10-year debt, with yields testing key technical levels. Meanwhile, Brent crude was steady near $118 per barrel on Thursday after positive euro zone data, although a subdued demand outlook by the International Energy Agency (IEA) may weigh on prices.

Back home, the yields on 10-year 8.79% - 2021 bonds were trading 1 basis point higher at 7.85% from its previous close of 7.84% on Wednesday.

The benchmark five-year interest rate swaps were trading 1 basis point higher at 7.28% from its previous close of 7.27% on Wednesday.

Post WPI data Scenario:

Bond yields edged lower after the release of WPI data, which in a positive surprise cooled down to four year low at 6.62% (Provisional) for the month of January, 2013 as compared to 7.18% for December and 7.23% during the corresponding month of the previous year.

The yields on 10-year 8.79% - 2021 bonds receded by 3 basis points to 7.81% from its previous close of 7.84% on Wednesday.

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).  

Bond yields edge lower on RBI’s buy back announcement

The yields on 10-year 8.79% - 2021 bonds were trading 3 basis points lower at 7.84% from its previous close of 7.87% on Tuesday

Bond yields edged lower from its previous close, after the central bank announced that it would buy bonds via open market operations given the tight liquidity condition of banking system.

Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank has decided to conduct Open Market Operations by purchasing the government securities for an aggregate amount of  Rs 10,000 crore on February 15, 2013.

On the global front, US Treasuries were little changed in Asia on Wednesday, with many investors looking out to a 10-year debt auction and retail sales data later in the day to potentially pull the market out of its recent trading ranges. Meanwhile, Brent crude steadied on Wednesday, holding just below a nine-month high near $119 per barrel on forecasts for a faster-than-expected growth in global oil demand this year.

Back home, the yields on 10-year 8.79% - 2021 bonds were trading 3 basis points lower at 7.84% from its previous close of 7.87% on Tuesday.

The benchmark five-year interest rate swaps were trading 2 bps higher at 7.29% from its previous close of 7.27% on Tuesday.

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.

Financial Coffee

(Please click on the Newspaper link to read the full article)   INDIAN ECONOMY Inflation still high, says Subbarao India, Sweden amend tax treaty New bank licence norms ‘very soon’: RBI Deputy Governor Banks’ bad loans could go up as Govt delays payments to vendors We will focus on creating macro-economic stability: Rajan Forex reserves down by $595 mn to $295 bn Finance Ministry pegs growth at 5.5% this fiscal INTERNATIONAL ECONOMY Oil Exports Trim U.S. Trade Deficit as Fuel Gap Shrinks: Economy German Exports Rose in December to Cap Trillion-Euro Year Japan Posts Back-to-Back Current-Account Deficit in December China Festive Sales Seen Gaining as Economy Strengthens EQUITY MARKET 8 sectors which could be impacted by Budget 2013 Analysts don’t expect Nifty to correct sharply in near term BSE Sensex plunges to rock-bottom in 2013 after 7-day losing streak Chidambaram to launch Rajiv Gandhi equity scheme tomorrow DEBT MARKET Bankers want SLR reduced if HTM bond limit is cut IRFC mops up Rs 5,350 cr through tax-saving bond issue Call rates edge higher on reporting Friday Bond yields edge lower on March rate cut hopes Treasury 10-Year Yields Are Poised For Weekly Decline Spanish Bonds for Gain Second Day on ECB Policy Bets COMMODITIES Growth data may put gold under pressure Copper Rises Most in a Week on China’s Trade, Auto Data Brent Oil Rises to Nine-Month High on China World Cotton Surplus Estimate Raised on Bigger Crop in China FOREX Rupee depreciates the most in over a month on Friday Euro Near 2-Week Low, Poised for Weekly Drop, on Draghi Warning Brazilian Real Touches Highest Since May as Mantega Sets Ceiling Pound Posts Biggest Weekly Gain Versus Euro Since 2011  MUTUAL FUNDS Market rally fuels exits from equity schemes Rajiv Gandhi scheme: SEBI extends new fund offer period to 30 days Are fixed maturity plans losing sheen? INSURANCE Insurers can now invest up to 15% in equity of a company IRDA proposes to lower solvency margin to 145 pc for insurers REAL ESTATE ABG Group said be in talks to sell prime Worli plot Morgan Stanley may invest up to Rs 9-10 billion in Mumbai office development: Sources Real value U.K. Property Prices Increased in January, Acadametrics Says  OPINION Tax administration, heal thyself Better than it looks Should housing be given ‘infrastructure status’? - YES Should housing be given ‘infrastructure status’? - NO KNOWLEDGE CENTER Tax-savings Bonds are  Best option before Rates Fall Park money in a contingency fund Look beyond Section 80 C for tax-saving instruments Guarding against a weak rupee How the rupee’s movements can wreck your portfolio

Bond yields slip after CSO estimates GDP growth of 5% for 2012/13

The yields on 10-year 8.79% - 2021 bonds were trading 3 basis points lower at 7.88% from its previous close of 7.91% on Wednesday

Bond yields slipped after Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, estimated India's gross domestic product (GDP) to grow at an annual 5 percent in the 2012/13 fiscal year- the worst of all growth projections issued by the government and the RBI so far. Last month, Reserve bank of India had trimmed its GDP growth estimate for the fiscal year ending in March to 5.5 percent, the worst since 2002/03.

On the global front, US Treasuries stabilized in Asian trade on Thursday, and the rally in global shares paused as the market awaited European Central Bank's policy meeting later in the day. Meanwhile, brent crude was trading steady in a tight range, sub  $117 per barrel on Thursday as traders waited for the outcome of a European Central Bank (ECB) meeting and China trade data for more evidence that the global oil demand outlook was improving.

Back home, the yields on 10-year 8.79% - 2021 bonds were trading 3 basis points lower at 7.88% from its previous close of 7.91% on Wednesday.

The benchmark five-year interest rate swaps were trading 2 basis points higher to 7.26% against its previous close of 7.28% on Wednesday.