With rate cuts out of the picture, bond yields are expected to hover in a narrow range and harden in the second half of 2018. Inflation, the Centre’s fiscal policy, and domestic and global liquidity will set the tone

After a stellar run in 2016, bond markets put up a somewhat tepid show in 2017, which was surprising, given that the year began on a rather upbeat note. The only rate cut (by 25 basis point) by the RBI in August this year too failed to enthuse the bond markets. After the steep 1.2 percentage point fall in 2016, the yield on the 10-year G-Sec hardened in 2017, inching up by about 80 basis points....