There is a sense of fear among market-men after the US jobs data for May disappointed last Friday. New jobs, which were expected to grow by 1.5 lakh in May, grew only 69,000.
This in turn will have a bearing on the Nifty and the Sensex.
Expect these two indices to be range-bound under normal conditions at two per cent on either side. However, market-men are expecting a negative bias.
Stocks belonging to the capital goods sector are being touted as the next set of performers on Dalal Street.
Though commodity prices have eased worldwide, RBI is stuck with the depreciating rupee, which is acting as a neutraliser. Unless the rupee stabilises, RBI may have to postpone plans of a rate cut.
Ten year G-Sec yields are expected to bottom out in the 8.20 per cent 8.25 per cent range and remain range-bound with an upper limit of 8.45 per cent.
The rupee is expected be remain between 54.90 and 56.30 to a dollar levels this week. The rupee will strengthen further if it breaks 54.90 level.
Watch out for the Commerce Ministry's foreign trade policy pronouncement on Tuesday, especially the initiatives on goods and merchandise exports.
The world has more or less accepted the fact that the probability of Greece's exit is increasing with every passing day.
But the equation is not linear and the exit is easier said than done. In case, the exit happens it could question the existence of other countries in the Euro Zone.
The US 10-yr treasury will remain between 1.4 per cent and 1.6 per cent levels this week due to global risk aversion. However, the chances of a QE3 announcement by the US Fed are remote.
The Euro is expected to find support against the dollar between 1.2180 and 1.2360. The dollar index (DXY) would find it hard to break the 83 levels.
Nymex crude futures have a major support at $ 82.5 to a barrel and a pull back to $89 levels is expected.
Gold is expected to see a bearish week and might shed about four to five per cent over last week's close of $1622 to an ounce.