Bond yields hit a sweet spot, could remain stable for sometime

Bond yields have fallen considerably in the past few months and if bond dealers are to be believed, yields have found their sweet spot around the present level and would remain here for a considerable period of time.1Since the start of FY17, bond yields have fallen only three basis points, which is not necessarily bad for the market as the present yields of below 7.5 per cent for the 10-year benchmark bond, are considered quite healthy.  Indian stock market astrology prediction
The development is being interpreted as an indication of softening interest rates. Yields of bonds fall, when their prices go up, and this is an indication of interest rates moving south.Already, the Reserve Bank of India (RBI) said that adequate liquidity would be maintained in the system. The call money rate has also fallen to 6.5 per cent, the same level of the RBI’ policy rate.A stable interest rate environment is good for most; as economic activities can be built on the foundation of a stable interest rate regime.  Sensex Astrology 

The stability in the bond yields is causing some interesting investment behaviour in the market. While banks are busy booking profits,. Bond traders say aggressive bidding by large insurance companies, mainly Life Insurance Corporation of India, is making the auctions getting fully subscribed in less than 10 bids, which is quite unusual.  Share Market Astrology
According to one treasurer with a foreign bank, the lenders do not want to outbid these aggressive bids and are happy to sell their holdings, which anyway, are 8-9 percentage points more than the mandatory requirement. The big players are coming out aggressively because of the firm range that has been established in the bond market due to a number of balancing factors. RBI, as mandated by its liquidity framework, has promised to keep banking sector liquidity largely in a neutral zone. Acute liquidity deficits of around Rs 2 lakh crore as witnessed in the last financial year would unlikely happen now as the central bank is injecting money through open market operations (OMO), or secondary bond market purchases  Nifty Trading Tips
The liquidity shortfall in the banking system is close to Rs 75,000 crore now, which is less than one per cent of their net demand and time liabilities. Adding to it, falling inflation and the prospect of a normal monsoon has come as good news for the economy. In a boost to emerging markets, theUS Federal Reserve has also indicated that it would be in no hurry to raise rates. All these should make the rates fall rapidly. But that’s unlikely to happen as oil prices have started firming up again, which does not augur well for the fiscal deficit and inflation.  Jackpot Stocks Trading Tips
“The factors are well balanced on both sides. Right now the market is in a wait-and-watch mode and till June-July, yields should remain around these levels,” said Harihar Krishnamurthy, head of treasury at First Rand Bank. The market is not overtly worried about the rise in crude prices as long as it is not a sustained rally, Krishnamurthy said.  Commodity Market Astrology Tips