Bond yields to inch up on auction, US cues

Bond yields to inch up on auction, US cues

Mumbai: Indian federal bond yields are seen rising on early on Thursday, ahead of a $2.4 billion bond sale later in the day and tracking higher US yields.

The government is selling Rs40 billion each of 7.17% maturing in 2015 bonds and 8.13% 2022 bonds. It will also sell Rs30 billion of 8.26% 2027 bonds. The results of the sale are expected after 2:30 p.m. (0900 GMT).

Weekly food and fuel price inflation data around 0630 GMT will be watched for direction.

US Treasuries fell on Wednesday as rising stocks and easing concerns over Europe’s debt problems cut demand for safe-haven assets.

The yield on the Indian 10-year benchmark bond ended at 7.94% on Wednesday, down 1 basis point after trading in a narrow 7.92-7.94% band.

Traders see the yield in a range of 7.92-8% on Thursday.

Traders are also awaiting factory data on Friday and monthly inflation on Tuesday for clues on the central bank’s moves at the 16 Sept. mid-quarter policy review.