Indian federal bonds are expected to be steady early this week on some profit-taking after surplus cash fuelled a rally in the last two sessions, dealers said.
Market sentiment will be cautious ahead of Monday's meeting of central bank and government officials to finalise details of a new fund aimed at helping sterilise the ample foreign exchange inflows pouring into the galloping economy.
Bond yields eased last week, with the 10-year benchmark bond ending at 5.2505 percent on Saturday, four basis points below the previous week's near five-month high of 5.2890 percent. It shed seven basis points in just two sessions.
The bond had hit a six-month closing high of 5.3346 percent on Monday on fears interest rates have bottomed out.
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