Indian bond yields biased up on crude price, auction supply

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SummaryThe benchmark 10-year bond yield had closed 3 basis points lower at 7.88 percent on Thursday.

* Indian federal bond yields are likely to be higher as crude price spikes again, auction supply comes in, say dealers. The benchmark 10-year bond yield had closed 3 basis points lower at 7.88 percent on Thursday.

* Brent crude oil rose to a near five-month high above $117 a barrel on Thursday after Iran rejected calls for direct talks with the United States, while US crude prices fell amid pressure from growing domestic stockpiles in the Midwest.

* The RBI will auction 120 billion rupees of debt in the session, including 60 billion rupees of the benchmark bond.

* However, bonds will find support after advance economic growth estimate pegged FY13 GDP to expand at 5 percent, the lowest official projection so far.

* RBI Governor D Subbarao's comments that the advance GDP numbers will be factored in the March policy will build rate cut hopes.

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