Government bonds are likely to begin the new week on a ​cautious note as focus turned back to oil prices after ‌tension marked the first round of peace talks, with ​Iran shutting a crucial transit point ⁠and the U.S. threatening to restart attacks.

The yield on the benchmark 6.94% 2036 note is likely to move between 6.823 and ‌6.88%, according to a trader with a private bank. It closed at 6.8533% on Friday, ‌posting its fourth consecutive weekly decline. Yields move inversely ‌to ⁠bond prices.

"Though the current developments do not change ⁠the overall view, it makes the journey towards 6.80% target a bit more complicated," the trader said.

The benchmark Brent crude contract eased ​below $80 per barrel in Asian ‌trading, after the first round of talks between Iran and the U.S. resulted in the two countries agreeing to a roadmap toward a final deal within ‌60 days.

Shipping through the Strait of Hormuz ​had slowed on Sunday, pushing crude prices higher, after Iran closed shipping and peace talks began ⁠on a bumpy note.

Fluctuations in oil prices impacts India as the nation imports nearly 90% of its crude ‌oil requirement and a sustained fall could ease inflationary pressure and support the rupee, helping the central bank's efforts to attract dollar inflows.

Foreign investors have injected more than $2.25 billion into domestic bonds so far in June.

The Reserve Bank of India's rate panel chose to ‌adopt a wait and watch approach in keeping interest rates on ​hold earlier this month, to see if higher oil and food prices are likely to lead to ⁠more generalised inflation, minutes of the committee's meeting released on ⁠Friday showed.

RATES

India's overnight index swap rates are likely to remain little changed in early deals ‌after recent declines.

The one-year swap rate ended at 5.9%, and the two-year rate closed at 6.06%. The five-year ​rate settled at 6.34% on Friday.

Published on June 22, 2026