Government bonds ended lower on Wednesday, giving up earlier gains spurred by worse-than-expected US jobs data as the rupee ended almost flat and caution prevailed ahead of RBIís policy review next week.
Bonds initially gained as US Treasuries yields fell to the lowest in three months on Tuesday after data showed September job growth slowed to its weakest pace in 15 months, reducing expectations that the Federal Reserve would pare its bond purchases this year. The benchmark 10-year bond yield closed at 8.63%, up 2 bps on the day. In early trade, yields dropped as much as 7 bps to 8.54%. In the overnight indexed swap market, the benchmark five-year swap rate closed steady at 8.23%.