Parallel shift downwards on yield curve witnessed during the week

Monday, 27 October 2014 00:00 - - {{hitsCtrl.values.hits}}

By Wealth Trust Securities The bond market was seen taking a ‘U’ turn during the week ending 24 October 2014 as yields were seen declining considerably, driven by the outcome of the weekly bill auction at where the 364 day bill weighted average remained unchanged at 6.00% for a second consecutive week, against a steep increase in yields the previous week.

Buying interest along the yield curve mainly centering the 1 July 2022 and the 1 January 2024 maturities saw its yields dip to weekly lows of 7.70% and 8.00% respectively against its weeks opening highs of 8.20% and 8.50%. In addition, buying interest on the belly end of the yield curve saw yields on the three year duration decrease to 6.90%, the four year duration to 7.00% and five year duration to 7.20% while on the shorter end of the curve, durations centering the one year maturity were seen trading within the range of 5.95% to 6.10%. In secondary bill markets, the 364 day maturity was seen changing hands within the range of 5.90% to 6.00% as well. Given below are the closing, secondary market yields for the most frequently traded maturities: Rupee dips for a second consecutive week In dollar/rupee markets, the rupee on spot next contracts was seen depreciating above Rs. 131.00 towards the latter part of the week ending 24 October on the back of continued importer demand as spot contracts were not traded. Given below are some forward dollar rates that prevailed in the market.