Bond mkt likely to remain under pressure today

Global markets are not too supportive, US yields are a little lower, but currencies are presenting a big mixed picture, so the Indian bond market is likely to be edgy today, says CNBC-TV18's Latha Venkatesh.  

Also read: Weak Indian bond auction signifies yield confusion
The dollar was stronger against two currencies with which the Indian rupee is normally compared with- the Indonesia rupiah and the Brazilian real. That might have its own pressure along with the fact that some of the steps were rolled back.
As long as there is pressure on the dollar, the bond market will assume that RBI's job is not done and therefore, it could keep pressure on the bond market and liquidity tightness in some fashion, she added.
The big relief for the market is that nothing was announced over the weekend. There was a big fear that the RBI may announce a cash reserve ratio (CRR) hike, so there will be a minor relief, but after the initial relief, the pressure will remain on bonds and the market will begin to wonder whether the RBI will move even before the July 30 policy.
The Reserve Bank of India on Friday accepted nearly Rs 11,500 crore of bids at its weekly auction of Rs 15,000 crores of government bonds. This is after it allowed a T-bill auction and its open market bond sale to flop on Wednesday and Thursday in the debt market.
Bonds worth Rs 3,527 crores of 10-year, 19-year and 29-year bonds were allowed to remain unsold and devolved on the underwriters. However, post auction bond prices rose and yields fell sharply to end at 7.94 percent on the ten year.