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The monsoon outlook for this year will be released by the India Meteorological Department this week. The expectation is that it would predict a normal monsoon, which is likely to bring comfort to the bond Street.
The yield on 10-year bonds is expected to fall by a few basis points from the current levels this week. "If the monsoon is expected to be normal, then the yield on the 10-year benchmark bond will fall towards 7.75 per cent," said an official of an insurance company.
The yield on the 10-year bond ended at 7.79 per cent on Friday, compared with the previous close of 7.80 per cent.
The rupee might trade range bound this week because it is expected that even if it appreciates due to dollar flows in the domestic market, the Reserve Bank of India will intervene through government banks and mop up dollar flows in a bid to boost its reserves.
"The rupee might trade in the range of 62.20 to 62.50 to a dollar this week," said Sandeep Gonsalves, forex consultant and dealer, Mecklai & Mecklai.
