 "Govt bonds")
Indian government bond yields were largely unchanged in early trading on Friday, as traders awaited fresh debt supply, while US Treasury yields witnessed a further marginal upward move, which pushed yields higher earlier in the day.
The rise in yields, however, was capped as the central bank's record surplus transfer to the government has boosted underlying market sentiment.
The benchmark 10-year yield was at 6.9889 per cent as of 10:00 a.m. IST, following its previous close of 6.9919 per cent.
Indian debt markets were shut on Thursday.
"As expected the 7 per cent mark is acting as a major resistance level, and hence we are seeing some consolidation around this point," a trader with a private bank said.
New Delhi aims to raise Rs 29,000 crore ($3.48 billion) through a sale of bonds, which includes a new three-year paper, later in the day.
US bond yields rose on Thursday after data showed persistent strength in the labour market and business activity, reinforcing expectations that the Federal Reserve will take its time cutting interest rates this year.
Meanwhile, in the minutes of the Fed's latest meeting released earlier in the week, members acknowledged that disappointing inflation readings in the first quarter could delay rate cuts.
Bond yields had dropped on Wednesday, after the Reserve Bank of India's (RBI) board approved the transfer of a record Rs 2.11 trillion as surplus to the government for the fiscal year that ended in March.
The government's fiscal position is expected to strengthen after a better-than-estimated dividend transfer, and could further reduce some supply pressure, aiding the demand-supply dynamics.
The government is open to buying back more bonds and cutting borrowings through Treasury bills as part of its short-term cash management, a source familiar with the matter said on Tuesday.
The government has already cut the supply of Treasury bills by Rs 60,000 crore till the end of June.
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