Bond yields rise on US cues; inflation eyed - Economic Times

MUMBAI: Bond yields rose in early trade on Thursday, tracking U.S. Treasuries and on hawkish comments on price pressures by the RBI governor.

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At 9:15 am, the yield on the 10-year benchmark 6.35 per cent, 2020 bond was at 7.88 percent, up from Tuesday's close of 7.85 per cent. Markets were shut on Wednesday for a local holiday. Traders also await data on food prices around noon. Demand-side pressure on the economy can build up further and it is better to take some action now, Reserve Bank of India Governor Duvvuri Subbarao said on Wednesday, after he had raised interest rates last week.

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A poll on Monday found that 18 of 20 economists surveyed expect another increase in both the repo and reverse repo rates on April 20 when the central bank reviews policy. Traders are also awaiting a meeting between finance ministry and central bank officials, scheduled for March 29, where they will decide the borrowing calendar for the first half of 2010/11 that begins in April.

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