Bond yields ease on US cues; tbills sale eyed

MUMBAI: Bond yields edged slightly lower in early trade on Wednesday, tracking a fall in US yields, but dealers said results of the treasury bills
sale later in the day would be crucial to provide cues on the likely moves on interest rates.

* At 9:10 a.m., the yield on the Indian 10-year benchmark bond was at 7.56 per cent, one basis point lower than Tuesday's close. * The central bank will auction 30 billion rupees of treasury bills later in the day and the results are due after 2:30 p.m. (0900 GMT).

* US Treasuries rose in price on Tuesday as weak housing data and shaky stocks underscored the fragile state of the economic recovery, boosting demand for bonds at a government auction of two-year notes.

* The Reserve Bank of India (RBI) will decide on whether to conduct further bond buybacks under its 200-billion-rupee repurchase plan announced last week after looking at the liquidity situation, two official sources told Reuters.

* India will sell 150 billion rupees ($3.3 billion) of bonds on June 25, the government said on Monday. * RBI Deputy Governor Subir Gokarn said on Monday that the tight-liquidity situation was temporary and the central bank would consider other means to resolve the issue if the current measures do not help.

* India's central bank will exit from its loose policy at a "calibrated" pace, RBI Governor Duvvuri Subbarao said last Friday.