Kshitij Consultancy Services
Morning Briefing Daily forecasts on global Stocks, Commodity, Forex and Interest Rates markets
23 Oct 19. 1134 IST or 0604 GMT or 0204 EST
GOOD MORNING!
STOCKS

Asians are trading slightly in the red as the UK Parliament voted against reviewing the Withdrawal Bill within a period of three days. The UK might seek for further extension on the Brexit deadline. It will have to be seen as how the development on the Brexit is going to weigh on the equities. Broadly equities like the Dow, Nikkei, DAX, Sensex and Nifty can witness an intermediate dip in the near-term within their broader upmove. Shanghai is hovering above a crucial support which has to hold in order to avoid a fresh fall.

Dow (26788.10, -39.54, -0.15%) remains below 27000 and look vulnerable to test 26500-26400 on the downside in the near term. It will be important to see if the Dow bounce-back again from the 26500-26400 support zone or not.

DAX (12754.69, +6.73, +0.05%) remained stable yesterday and it will have to be seen as how the Brexit development is going to weigh on the index. A fall to 12450 is possible in case of a break below 12600. However, the bigger picture remains bullish for the index to test 13000-13200 on the upside in the short term.

Nikkei (22533.82, -15.08, -0.07%) remains stuck in between 22400 and 22650. A corrective fall to 22250-22200 looks likely before we see the uptrend resuming towards 22700-23000.

Shanghai (2949.80, -4.58, -0.16%) has bounced yesterday and seems to hold 2900. While it sustains above 2900, a rise to 3000 and 3050 is possible in the coming days which will then wipe out the danger of seeing a fall to 2850.

The intermediate resistance at 11700 mentioned yesterday on the Nifty (11589.90, -71.95, -0.62%) is holding well. A test of 11470 looks likely on a break below the immediate support level of 11585. However, the broader bullish view will remain intact as long as the Nifty trades above 11400.

Sensex (38963.84, -334.54, -0.85%) on the other hand has dipped below 39200 and can test 38750-38500 in the near-term and then can reverse higher again to keep the broader bullish view intact.

COMMODITIES

Crude, Gold and Silver are stable and trade within narrow region. Copper looks bearish.

The American Petroleum Institute (API) on Tuesday reported a build of 4.45 million barrels in the U.S. crude oil inventories for the week ending Oct 18. Brent (59.42) and WTI (54.07) are stuck in the 61-58 and 56-53 region respectively and is expected to hold for this week keeping crude prices stable for now. Preference for an eventual break on the downside to test lower levels of 56 and 51 respectively.

Gold (1491.60) is also stuck below 1500 but is finding difficulty to fall below 1480 just now. We may see sideways movement in the 1480-1500 for a couple of sessions before a sharp fall towards 1460/50 or lower is seen.

Silver (17.53) is stable and is likely to fall targeting 17.0-16.5 in the near term. View remains bearish while below 18.

Copper (2.6255) has dipped but would be important to see if it manages to re-attempt a test of 2.65+ levels in the near term. While below 2.65, view is bearish towards 2.55.

FOREX

Dollar Index (97.58) has bounced well from 97.14 and could have scope of rising towards 98.85 on the upside before seeing another dip from there. Support on the weekly candles seem to hold well for now.

Euro (1.1118) has dipped on Dollar strength and is falling as expected. A test of 1.11 is on the cards over today and tomorrow.

Dollar-Yen (108.31) could test 108 or lower levels of 107.65 before bouncing back from there in the medium term towards 109 or higher. View is bearish for the near term.

EUR-JPY (120.41) is down sharply as expected and the currency pair is headed towards 120-119 for the near term.
Pound (1.2843) looks weak and is expected to fall towards 1.28-1.2750 in the near term.

Aussie (0.6835) could also test 0.68 or lower while below resistance at 0.69. View is bearish for the next few sessions.

The USDCNY (7.0831) has risen slightly and could test 7.10 before coming off towards 7.04 again.

Dollar-Rupee (70.9350) has resistance in the 71.05/00 region which if holds, could keep the pair lower. We may see a test of 70.75 today with a broad trade range of 70.75-71.05 over the next couple of sessions.

INTEREST RATES

The US Treasury yields have dipped and have key supports near current levels which have to hold to avoid a fresh fall. The German yields seem to consolidate within their overall uptrend. The 10Yr (07.26 GS 2029) GOI remains mixed and can be range bound in the near term.

The US 2Yr (1.57%), 5Yr (1.57%), 10Yr (1.75%) and 30Yr (2.24%) Treasury yields have dipped across tenors. The 10Yr and the 30Yr have support near current levels at 1.70% and 2.20% respectively. A break below these supports could delay our bullish view of seeing a rise to 1.87%-1.90% on the 10Yr and 2.40%-2.45% on the 30Yr. We will have to wait and see.

The German 2Yr (-0.67%) and 5Yr (-0.61%) remained stable while at the far-end, the 10Yr (-0.37%) and 30Yr (0.15%) yields have dipped slightly. The broader bullish view intact and we expect the 10Yr to test -0.30% in the short term. The 30Yr can rise to 0.30% on a strong break above 0.20%.

The 10Yr (07.26 GS 2029) GOI (6.7076%) remained stable above 6.70% yesterday and continues to keep the near-term outlook mixed. As we have been mentioning for some time, the yield can remain range bound between 6.65% and 6.75%. A breakout of this range will decide the direction of the next move

The 10Yr (06.45 GS 2029) GOI on the other hand has inched slightly higher and closed at 6.5434% yesterday as compared to 6.5185% on Friday.

DATA TODAY

No major data release today.


DATA YESTERDAY:-
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US Existing Home Sales
...Kshitij Expn 5415 K ...Expected 5450 K ...Previous 5500 K ...Actual 5380 K

DISCLAIMER
These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

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