Call Money & Gilts

Sentiment: Positive in the morning, subdued in the afternoon.

* Call money rates remained stable in a band of 6.60 per cent to 6.80 per cent due to easy liquidity condition.

* Response to the repo auction was good. The RBI received bids of Rs 23,658 crore, out of a total amount of Rs 26,185 crore.

* Government security (G-sec) prices moved by 20-25 paise at the medium and long end of the market in the morning, driven by the liquidity.

* The 8.07 per cent 2017 paper, which has been illiquid so far, gained attraction of the participants.

* G-sec prices came down in the afternoon by 10-15 paise as the RBI governor Bimal Jalan said the repo rate at 5.75 per cent is sustainable.

* The governor's statement that the central bank can take further devolvement also hampered market sentiment.

* In the corporate bond market, driven by the liquidity, yields fell by 5-7 basis points for the 'AA' and 'AA+' papers.

Outlook: Government security prices may move up by 15-20 paise at the more than 10-year maturity segment. Call money rates are likely to remain soft in the range of 5.60 per cent to 5.80 per cent.

Forex

Sentiment: Positive

* The rupee strengthened by four paise to close at 48.7300/7350 due to good dollar supply.

* The supply was mainly from the exporters and remittances from abroad.

* Foreign and private sector banks were the main suppliers of the greenback.

* Public sector banks mopped up dollars from the market, which checked the strengthening of rupee.

* Dollar mop-up by the public sector banks were seen as intervention by the RBI.

* Forward premium rates fell by 8-10 basis points across maturity, tracking the spot rupee.

Outlook: The rupee should open higher on Monday as the dollar supply from the exporters are likely to continue. Forward premiums are likely to go up as the money market liquidity will remain easy.