Bond yields traded higher on Friday after Chief Economic Adviser (CEA) K V Subramanian has said food inflation is likely to moderate on account of the twin impact of opening up of economic activities and good monsoon. Moreover, he asserted that high food inflation has not impacted a large section of population as they are being given free ration under the Pradhan Mantri Garib Kalyan Yojana.
In the global market weaker than anticipated readings on jobless claims and durable goods orders kept Treasury yields in a tight range on Thursday as investors saw little reason for the Federal Reserve to deviate from its plans to raise interest rates in 2023. Furthermore, oil prices rose, heading for a fifth straight week of gains, with demand growth seen outstripping supply on bets that OPEC+ producers will be cautious in returning more output to the market from August.
Back home, the yields on new 10-year Government Stock were trading 2 basis points higher at 6.03% from its previous close of 6.01% on Thursday.
The benchmark five-year interest rates were trading 5 basis points higher at 5.69% from its previous close of 5.64% on Thursday.