Indian federal gilt yields slumped by 16 basis points for the week ended Friday, July 3 to stand at 6.83% as against 6.99% on Friday, June 26 a week ago.

At the beginning of the week, on Monday, June 29 Indian federal bond yields ended steady on the back of excess liquidity in the banking system. The yield on the 6.05% bond maturing in February 2019 ended flat at 6.99% as compared to previous close. There were only 10 trades in the bond on the central bank`s platform today.

After that, on Tuesday, June 30 yields federal bond yields ended marginally up on the back of excess liquidity in the banking system. The yield on the 6.05% bond maturing in February 2019 ended 2 basis points up at 7.01% as compared to previous close of 6.99%. There were only 54 trades in the bond on the central bank`s platform today.

In the mid-week, on Wednesday, July 1 bond yields ended lower as banks added positions to meet their statutory reserve needs at the start of new quarter and the absence of an auction this week bolstered up the sentiment. The yield on the 6.05% bond maturing in February 2019 ended 4 basis points down at 6.97% as compared to previous close of 7.01%.There were only 45 trades in the bond on the central bank`s platform today.

Thereafter, on Thursday, July 2 bond yields declined sharply as the market expected that the government borrowing will not be as high as expected earlier, but traders remained cautious ahead of Monday`s budget. The yield on the 6.05% bond maturing in February 2019 ended 10 basis points down at 6.87% as compared to previous close of 6.97%. There were only 50 trades in the bond on the central bank`s platform today.

Finally, at the last day of the week, on Friday, July 3 bond yields declined fuelled by hopes the government will probably announce lower-than-expected borrowing in the updated budget on Monday. The yield on the 6.05% bond maturing in February 2019 ended 4 basis points down at 6.83% as compared to previous close of 6.87%. There were only 54 trades in the bond on the central bank`s platform today.