Bond yields down, but rate hike fears linger

Subir GokarnOn Wednesday Federal bond yields and trade relieved representing US Treasuries, but traders alleged that they could rise later in the day on apprehensions about a rate rise in November.

Subir Gokarn, a deputy governor at the Reserve Bank of India (RBI), said on Tuesday increase was well above the central bank's comfort zone. After this expectation for more monetary contraction was enthusiast.

He had also said the RBI was near an end of its policy normalizing. A dealer at foreign bank held that the mood is carefully bullish. Though rate hike concerns may lead to some sell-off, global economy is still weak. As a result, the RBI may not raise rates piercingly.

At 10:37 a. m. (0507 GMT), the benchmark 10-year connection yield was losing one basis at 7.93 per cent. On Tuesday, it had shrunk back the day's low of 7.90 per cent after Gokarn's clarification.

Traders expect the yield to move in a 7.90-95 per cent crowd during the day.

Volume was low at 19.6 billion rupees ($442.4 million) on the central bank's trading platform weigh against with around 30-40 billion rupees traded by mid-morning.