It does appear that Prime Minister Modi had a very productive trip to the US.

His meetings secured investment pledges by some American businessmen and both countries sought to end some of their trade disputes at the World Trade Organisation.

Modi has since left for Egypt.

Modi and his engagements dominated the newsprint.

The markets, however, were the in the grip of central bank hawkishness.

Federal Reserve Chairman told US lawmakers that as indicated by the economic projections of Fed officials earlier this month, there could be two more rounds of interest rate increases.

Two other officials, at separate engagements, hinted they may opt for a pause to digest the impact of past hikes and also incoming economic data.

Back in India, the minutes of the Reserve Bank of India’s monetary policy committee meeting showed that RBI officials remained hawkish and attempt to dispel any hopes of early rate cuts.

"Our job is only half done, bringing inflation to the target band. Our fight against inflation is not yet over. We need to undertake a forward-looking assessment of the evolving inflation-growth outlook and stand ready to act if the situation so warrants", Governor Shaktikanta Das wrote in the minutes.

Domestic Markets Last Week:

Stocks closed the week lower after hawkish commentary from central bankers forced some consolidation. The indices snapped a 4-week winning streak. Shares of Adani companies fell after Bloomberg reported that the US authorities have been looking into representations the Group made to American investors, following Hindenburg Research's report.

Yields fell on Friday but closed higher for the week after central banks in the US and UK indicated interest rates will continue to rise in the fight against inflation. MPC minutes showed continued hawkishness on the part of RBI members on the committee. Strong demand at the weekly auction boosted bonds on Friday.

The rupee fell slightly for the week owing to a rise in the dollar index. The dollar rose to a one-week high due to continued hawkish comments from the US central bank chief. But strong capital inflows earlier during the week supported the rupee. Broadly, the rupee moved in a narrow range against the dollar.

Global Markets Last Week:

Stocks fell, posting their worst week since March, due to worries that central banks across the advanced countries will drive up interest rates to cool down inflation.

Yields fell in line with the trend sparked in the European markets after data showed the economy was on a downturn in Europe. Separately, traders believe Fed might go for only one more round of rate hikes as against 2 rounds as was indicated by Fed chairman Powell.

The dollar rose on Friday as investors sought safety in the US currency amid concerns about global economic growth. Slowing growth in Europe boosted the dollar. Hawkish comments from the Fed officials also listed the dollar.

Corporate Bonds

Secondary Market

Yields rose by 5-6 basis points across tenure in the secondary market this week on expectations that yields may rise in the next quarter as the supply of bonds is likely to surge. Mutual funds were net sellers while banks were on buying side.

Outlook For This Week

Stocks are likely to consolidate amidst worries over the health of the global economy. Concerns about more rate hikes may keep the sentiment weak. Bond yields could fall tracking in keeping with their US counterparts. But they could move in the 7.05 to 7.10 percent range, up from 7.00 to 7.05 percent previously. The rupee is likely to weaken as the safe-haven appeal of the dollar could keep the US unit firm. Soft data in Europe has boosted the dollar.

In Other news

• PM Modi says Indians are brilliant in every field, not just in Spelling Bee.
• Modi meets with Elon Musk and Ray Dalio as global money flocks to India.
• RBI paper says the twin impact of Kharif MSP hike on CPI may balance out.
• RBI paper says one adverse weather event is no threat to econ stability.
• OPEC supply shocks can lead to a fall in econ output, says RBI paper.
• RBI to remove MIFOR from the list of significant benchmarks after Jun 30.
• India, the US agrees to end six trade disputes at WTO.
• Accenture results signal caution for Indian IT cos, says Jefferies.
• Fitch Ratings raises India FY24 GDP growth forecast by 30 bps to 6.3 percent
• Titanic Sub Crew Dead After Vessel’s Catastrophic Implosion.
• Yellen Sees Lower US Recession Risk, Says Consumer Slowdown Needed.
• Powell Signals Higher Rates as Lawmakers Press Him on Bank Rules.
• Eurozone economy has slowed sharply, business survey shows.
• UK services sector price rises to deliver a blow to BoE inflation plans.
• Goldman Sachs is cutting about 125 managing directors globally.
• JPMorgan cuts nearly 40 investment bankers in the US.