GOOD MORNING!
FOREX
The Dollar Index may trade below 101 with decent chances of a break below 99 to test 98/97 while Euro can test 1.17/1.1750 on a break above the 1.15-1.1650 zone. EURINR may dip towards 107/106 if the Rupee shows an appreciation today against the dollar on the onshore markets. EURJPY can trade within the 182-185 zone while the USDJPY has held below 160.50 and may have scope to test 157/156 on the downside. USDCNY may trade within 6.85-6.90 region for a few sessions. Aussie and Pound can rise within the 0.69-0.72 and 1.31-1.35 region respectively. The USDINR is likely to open with a gap down today but whether it would show 93 or lower on the spot is to be seen. We would expect a stronger Rupee over today and the coming week.
Dollar Index (99.86) is likely to trade below 101, in the 99-101 region. However, we may not negate a possible dip to 98-97.50 in the medium term.
EURUSD (1.1557) has been trading within the 1.15-1.1650 region but may have some scope to rise to 1.17-1.1750 on the upside in the next 1-2 weeks before resuming a decline towards 1.14.
EURINR (107.7361) has dipped as expected and could come down further if we see any significant decline in the USDINR today. A test of 106 or slightly lower on EURINR is a possibility.
EURJPY (184.01) may continue to trade within the 185-182 region for now till we see a decisive breakout on either side of the range.
Dollar-Yen (159.24) seems to be declining from 160.50 and needs a decisive break below 158 for a decent correction to 156 or slightly lower. Such a dip if seen can come along with a possible dip in the Dollar Index below 99.
USDCNY (6.8820) is likely to trade within 6.85-6.90 region for some more sessions.
Aussie (0.6892) has interim resistance at 0.70 but if that breaches, it can rally towards 0.71/72.
Pound (1.3258) is likely to trade below 1.34 with a downside limit of 1.31/32 in the near term.
USDINR (94.8350, OTC close on 30th March) has quoted 93 on the NDF today. However, we have to see if the spot may open lower with a gap down today and can actually print a low of 93 today or not on the onshore market. We may expect a decent appreciation in the Rupee over today and the coming week.
INTEREST RATES
The US Treasury Yields have risen back well from the support. That keeps intact our broader bullish view of seeing more rise. It has also negated the chances of the corrective dip expected yesterday. The US NFP and Unemployment rate data release tomorrow will need a close watch. The German yields are coming down to test its support as expected. Thereafter the broader upmove can resume. The 10Yr GoI was closed yesterday. It has to sustain above its immediate support to sustain the surge and move further higher. Else a corrective dip is possible. We will have to wait and see.
The US 10Yr (4.36%) and 30Yr (4.93%) Treasury yields are rising back. The support at 4.3% (10Yr) and 4.85% (30Yr) have held well. This keeps intact our broader bullish view of seeing 4.5%-4.6% (10Yr) and 5.05%-5.1% (30Yr). It has also negated the chances of the fall to 4.25%-4.2% (10Yr) and 4.8%-4.75% (30Yr) mentioned yesterday.
The German 10Yr (2.98%) and 30Yr (3.46%) yields remain lower. It keeps intact our view of seeing 2.95%-2.9% (10Yr) and 3.4%-3.35% (30Yr) on the downside first. Thereafter the broader upmove can resume targeting 3.2% (10Yr) and 3.65% (30Yr) over the medium term.
The 10Yr GoI (7.0345%) was closed yesterday. If it sustains above 6.95%, a further rise to 7.1%-7.2% can be seen. Else, a fall to 6.8% is possible. We will have to wait and watch.
STOCKS
Global equities remain volatile amid renewed Middle East tensions. Dow has slipped after failing near 47000 but can still rise towards 47500-48000 while above 45000. DAX is under pressure but may bounce towards 23800-24000 if it holds above 23000. Nifty has failed to sustain gains and can decline further towards 22400-22200. Nikkei has reversed from recent highs and needs to hold above 52000 to regain strength towards 55000-55500. Shanghai is attempting a breakout above 3950 which can take it towards 4000-4050.
Dow (46388, -0.89%) tested a high of 47090 but could not sustain above it and closed lower at 46806 yesterday. Today it is falling again on fears of continued tensions in the Middle East, but it can remain above 45000 and eventually break above 47000 to rise towards 47500-48000.
DAX (23116, -1.46%) rose to 23600 yesterday but is falling sharply today amid fresh tensions in the Middle East. While above 23000, a bounce back can be seen which may take it higher towards 23800-24000.
Nifty (22679.40, +1.56%) as mentioned earlier, opened higher near 22900 but failed to sustain and has fallen back to close lower. A further decline towards 22400-22200 can be seen in the coming sessions.
Nikkei (52890, -2.51%) tested a high of 54730 in line with our expectations but could not sustain higher and has fallen back below 54000. It needs to hold above 52000 to see a rise towards 55000-55500.
Shanghai (3,933.80, -0.37%) is attempting to break past 3950, and a sustained break above this level can take it higher towards 4000-4050.
COMMODITIES
Crude prices remain firm with upside intact amid ongoing Middle East tensions. Brent can rise towards $115-$120 and extend towards $130-$150 on a break above $120, while WTI may move higher towards $110-$115. Gold remains weak below $4750 and can decline towards $4500-$4400. Silver may fall further towards $70-$68 below $75. Copper has turned weak again and can drop towards $5.40-$5.30 on a break below $5.50. Natural Gas continues to hold above $2.80 and may remain range bound between $3.30-$2.80.
Brent ($106.44) briefly tested a low of $98.35 yesterday but failed to sustain lower and has bounced back sharply above $100 today. The view remains intact for a rise towards $115-$120 in the near term. Thereafter, if tensions in the Middle East persist and a break above $120 is seen, it could turn further bullish towards $130-$150 over the coming months.
WTI ($104.38) dipped to $100 yesterday but has bounced back today in line with our expectations and can rise further towards $110-$115 in the coming sessions.
Gold ($4690.90) has failed to break above the immediate resistance and has fallen back. While below $4750, a further decline towards $4500-$4400 can be seen in the near term.
Silver ($72.15) has faced rejection near $75 and has fallen back. While below this resistance, a further decline towards $70-$68 remains likely.
Copper ($5.5615) has fallen back below $5.60 after testing a high of $5.66 yesterday, contrary to our expectations. A break below $5.50 can take it further down towards $5.40-$5.30.
Natural Gas ($2.8570) is holding above the support near $2.80, and while this holds, the earlier mentioned range of $3.30-$2.80 can persist for some time.
DATA TODAY
GMT 0:30 IST 06:00 Australia Trade Balance A$ Bln
...Expectations 2.58 ...Previous 2.63
GMT 5:00 IST 10:30 IN Manufacturing PMI
...Previous 56.90
GMT 6:30 IST 12:00 CH CPI
...Expectations 0.50 ...Previous 0.13
GMT 12:30 IST 18:00 US Trade Balance
...Kshitij -67.53 ...Expectations -59.80 ...Previous -54.46
DATA YESTERDAY
==============
GMT 22:30 IST 04:00 AU PMI
...Previous -15.6 ...Actual -27.9
GMT 23:50 IST 05:20 JP Tankan Large Manufacturers Index
...Expectations 16.0 ...Previous 15.0 ...Actual 17
GMT 0:30 IST 06:00 JP PMI
...Expectations 51.4 ...Previous 53.0 ...Actual 51.6
GMT 1:45 IST 07:15 CN PMI
...Expectations 51.8 ...Previous 52.1 ...Actual 50.8
GMT 7:30 IST 13:00 CH PMI
...Expectations 47.1 ...Previous 47.4 ...Actual 53.3
GMT 8:00 IST 13:30 EU PMI
...Expectations 51.4 ...Previous 50.8 ...Actual 51.6
GMT 8:30 IST 14:00 UK PMI
...Expectations 51.4 ...Previous 51.7 ...Actual 51.0
GMT 9:00 IST 14:30 EU Unemp
...Expectations 6.1 ...Previous 6.1 ...Actual 6.2
GMT 12:15 IST 17:45 US ADP Emp
...Kshitij 103.81 ...Expectations 42.0 ...Previous 66.0 ...Actual 62
GMT 12:30 IST 18:00 US Retail Sales (MoM)
...Kshitij 0.15 ...Expectations 0.4 ...Previous -0.1 ...Actual 0.6
GMT 13:30 IST 19:00 CA PMI
...Previous 51.0 ...Actual 50.0
GMT 14:00 19:30 US Manufacturing ISM
...Kshitij 51.81 ...Expectations 52.3 ...Previous 52.4 ...Actual 52.7
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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