See 10-yr bond at 9.2% in 2 weeks: StanChart Bk

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » RELATED NEWS See more bond auctions later this year: Axis Bank Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

Sundeep Bhandari , Regional Head-Global Market South Asia at Standard Chartered Bank sees the 10-year going over 9% soon.

He expects rate hikes post the credit policy announcement in July if inflation and oil continue to be the concerns. He sees rupee at 43.8 to a dollar moving into the 44 level in the short-term.

Excerpts from CNBC-TV18's exclusive interview with Sundeep Bhandari:

Q: What do you expect in the coming week, do you think the 10-year yields will shoot up even beyond the 9% mark?

A: Certainly, you are right about the quietness in the market. We do believe tomorrow's action obviously will push the 10-year over 9% certainly and we could see the 10-year go to 9.2% in next couple of weeks.

Q: What are you expecting by way of Central Bank action at all? Do you think the yield curve is already reflecting all the bad news or do you think that the Central Bank will come with more injections of rate increases in July itself?

A: We do not think it will increase in July, but we think that post-July, post the credit policy, if oil prices continue to shoot up and inflation remains a concern, we expect inflation to come out by about 11.3% tomorrow. If those concerns remain, we will not rule out a further 50 bps hike in the rate and a further 25 bps hike in CRR.

Q: What happens on the rupee front, at the moment you would advice the exporter to come and sell at 43.35- 43.50 levels, what are you expecting in terms of rupee level a quarter down the line?

A: Probably 43.8 moving into the 44 level in the short-term. We believe the Central Bank has intervened and we also believe the Reserve Bank of India has intervened in the market place to avoid volatility in the rupee. Given the global cues, the concerns in the domestic stock market, the rupee may well weaken and in the short-term it is only a matter of time before it breaks through 43.50 and moves up to 44 levels. So if I was looking three to four months forward, I would say 44.