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).

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 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 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.

Bond yields rise a tad after release of CPI and IIP figures

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.

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(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

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(Please click on the Newspaper link to read the full article)   INDIAN ECONOMY Foreign funds pour more into China than India in Jan India's savings rate to dip to 30%: India Ratings India's economic growth slowdown could be worse than expected, shave a 1% off Chidambaram f'cast FDI inflows can grow ten-fold, onus on govt to get that done: Experts Growth likely to touch decade low of 5% this fiscal: CSO 8% growth for India will take tough decision, time: IMF India Predicts Decade-Low Growth Amid Inflation Risks  INTERNATIONAL ECONOMY Fewer Workers Filed Claims for Jobless Benefits in U.S. Draghi Signals Euro Strength May affect ECB’s Recovery Efforts Carney Backs Flexible Inflation Targeting in BOE Testimony Worker Productivity in U.S. Declines U.K. Manufacturing Rises Most Since July on Machinery Output Spain Borrowing Costs Rise Amid Corruption Allegations U.S. Consumer Confidence Rises for First Time in Five Weeks Stournaras Says Greek Recovery May Begin by End-2013 EQUITY MARKET India Inc’s investment abroad jumps 179% in January Consumer durables, realty stocks pull Sensex down 59 points Sensex falls for 5th day, NTPC, Coal India shares down over 2%, Nifty positive at close Merger, demerger deals need SEBI approval now It’s only a conditional nod for Diageo-United Spirits open offer DEBT MARKET Bonds remain bullish on steady demand ‘Retail home loans likely to grow by at least 20% this fiscal’ Treasuries Gain as ECB Concern Keeps Yields Unde 2% Spain Borrowing Costs Rise Amid Corruption Allegations China Injects  860 Billion Yuan via Reverse Repos in Week German Bonds Rise as Draghi Says Policy Can Remain Accomm COMMODITIES China remains top gold producer for sixth year Forex movements hold key to gold’s direction Zinc Leads Metals Slump as Europe Crisis Fuels Demand Concerns Platinum Rally Stalls on Speculation Miners May Boost Selling Brent Crude Rises to Four-Month High, Extends WTI Premium Oil Falls as Draghi Says Euro Strength May Hamper Growth FOREX Rupee slips to 53.22 on lower GDP estimate Euro Falls Most Since July as Draghi Warns of Slowing Inflation Brazil’s Real Surges as Central Banker Says Inflation Rate High Canadian Dollar Falls From 2-Week High Before Jobs Report Aussie May Test 4-Month Low Versus Greenback: Technical Analysis   MUTUAL FUNDS Rajiv Gandhi scheme: SEBI extends new fund offer period to 30 days Are fixed maturity plans losing sheen? Central Public Sector Enterprise ETF launch may be put off INSURANCE Random investments in insurance products to reduce tax can cost you dear in long-run IRDA proposes to lower solvency margin to 145 pc for insurers REAL ESTATE Correction in housing prices to continue for some time: NHB Panacea, Bestech join to develop township OPINION Rajesh Bhayani: Gold prices in correction mode Glass half full Montek Singh Ahluwalia: CSO ignored rising trend in economy for FY13 estimates Time we raised direct taxes 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.

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(Please click on the Newspaper link to read the full article)   INDIAN ECONOMY IMF CUTS GROWTH FORECAST Global Consumer Confidence Dips, Indians Still Most Optimistic Economy to grow slower at 5.6% in 2012-13: NCAER Policy changes key to our ratings review: Fitch INTERNATIONAL ECONOMY Fed Says Banks Forecast Improved Lending Outlook for 2013 Housing Packs Punch for U.S. Growth in 2013 and Beyond Obama’s Fiscal 2014 Spending Plan Said to Be Delayed Until March Australia’s Trade Deficit Narrows on Coal, Iron Ore Export Surge  EQUITY MARKET Banking, fin services stocks drop on weak Q3 earnings Sensex ends at 3-week low sentiment still weak FMCG volumes decline, but margins hold fort in third quarter India Inc sought debt restructuring for 126 cases in 2012 India on track to become steel powerhouse: E&Y Global M&A in healthcare IT grows $7 b in 2012  DEBT MARKET Short-term Paper Yields Fall Below Bank Base Rates Bond yields tread water on Monday Call rates edge tad higher in second half of reporting fortnight Spanish, Italian Bonds Slide Amid Signs of Political Risk China Five-Year Swaps Climb to Two-Week High as Economy Improves Brazil’s Swap Rates Drop on Outlook for Currency; Real Declines COMMODITIES Gold remains firm, silver falls, Platinum Rises to 17-Week High; Palladium, Gold Advances Platinum Supply Falls to 13-Year Low as Mines Close: Commodities Oil Trades Near One-Week Low on Iran Talks Offer, Europe Crisis  FOREX Rupee settles at 53.28 against dollar Euro May Hit 3-Week Low, Credit Suisse Says: Technical Analysis Euro to Weaken to 10-Week Lows Over Next Year, Wells Fargo Says Pound Rises Versus Euro Even as Construction Contracts  MUTUAL FUNDS Gilt assets jump 10 times in first 3 quarters of FY13 Budget may offer tax sops on pension products by mutual funds MFs sport 'RGESS' tag to tap tax-saving investment  INSURANCE Irda to Stop Schemes that Guarantee Highest NAV IRDA likely to finalise norms for traditional life insurance policies soon REAL ESTATE Need to relax land use norms to boost low-cost housing: Maken Discounts through real estate group buys OPINION Sukumar Mukhopadhyay: GST - 'Paradise lost' from fractured design Abheek Barua: Post-policy blues Britain drifts away from EU 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