GOOD MORNING!
FOREX
The ECB kept rates unchanged but hinted at a December 2026 rate hike. EURUSD could rise towards 1.1250 if it sustains a move above 1.12 before reversing, while the Dollar Index could rebound provided support at 101.50–101.30 holds. Dollar-Yen may dip to 157 before bouncing towards 158+, whereas EURJPY is headed towards 177/178. EURINR could reach 107 if it sustains a rise above 106.60, while USDCNY is headed towards 6.65. The Aussie remains broadly bullish above 0.70, with near-term trading expected within 0.70–0.7070 before a breakout in either direction; the pound looks bullish towards 1.34/35. USDINR could rise gradually to 95.50, with a break above that level opening the way to 96.00.
EURUSD (1.1195) trades slightly higher. The ECB kept rates unchanged as widely expected but has hinted at a Dec-26 rate hike. A sustained rise from here above 1.12 can lead to an initial rise towards 1.1250 before reversing from there. Dollar Index (101.75) trades lower. But while it holds above 101.50-101.30, it can bounce back eventually.
Dollar-Yen (157.49) could decline to 157 while below 158; thereafter, a bounce can be seen. On the other hand, EURJPY (176.31) could rise towards 177/178 soon.
EURINR (106.60) has risen well and if it manages to sustain rise above 106.60, it can rise to 107 or higher soon.
USDCNY (6.6581) has broken below 6.66 and is headed toward 6.65.
Aussie (0.7034) dipped from 0.7068, just below our mentioned level of 0.7075. While this holds, we may expect trading between 0.70-0.7070 before a breakout is seen on either side. Overall view is bullish above 0.70.
Pound (1.3393) looks bullish towards 1.34/35 in the coming days.
USDINR (95.2650) traded within 95.38-95.17 region yesterday. A slow rise to 95.50 is on the cards, a break above which will open doors for a further rise t 96.00.
INTEREST RATES
The US Treasury Yields have come down sharply. The fall is happening first in line with our expectation. They can dip more to test their support and then resume the broader uptrend. The US PCE data release today will need a watch. The German Yields can also come down from current levels to test their support. Thereafter a fresh rise is possible. The 10Yr GOI is witnessing the corrective fall as expected. It has room to go down further from here.
The US 10Yr (4.92%) and 30Yr (5.28%) Yields have come down. The fall to 4.85% (10Yr) and 5.2% (30Yr) is happening first. After that a fresh rise can take them higher to 5.15%-5.2% (10Yr) and 5.4% (30Yr) and higher.
The German 10Yr (3.35%) and 30Yr (3.70%) Yields can fall to 3.25% (10Yr) and 3.6% (30Yr) while below 3.4% (10Yr) and 3.75% (30Yr). A bounce thereafter can trigger a rise to 3.7% (10Yr) and 4%-4.1% (30Yr).
The 10Yr GoI (7.3902%) has come down below 7.4%. That keeps intact our view of seeing 7.3% on the downside now.
STOCKS
Dow needs to sustain above 52000 for a rise towards 53000 or higher. DAX can extend towards 26500-26600 if it sustains above 26000, else it can pull back towards 25700 or lower. Nifty needs to break 23000 to extend towards 23200, else a pullback towards 22700 cannot be ruled out. Nikkei remains weak below 64000, with scope to decline towards 62000. Shanghai needs a decisive break below 3600 to move towards 3500.
Dow (52342.56, -0.25%) has opened with a gap down near 52000 but recovered well from there. If it sustains above 52000, there is scope for a rise towards 53000 or higher over the coming week.
DAX (26039.68, +1.31%) has risen well to test the high of 26106 before closing, in line with our view on strong corporate earnings. If it can sustain above 26000, the rise may extend towards 26500-26600. Else a failure to hold this level could trigger a pullback towards 25700 or lower.
Nifty (22936.75, +1.05%) has broken above 22800 contrary to our earlier view and tested the high of 22961 before closing. There is strong resistance at 23000, which needs to break for the upside rally to sustain and extend towards 23200. Else a pullback towards 22700 cannot be ruled out.
Nikkei (62773.41, -2.92%) failed to sustain above 64000 and has fallen sharply to the current level in line with our view. Further decline towards 62000 remains possible in the near term while it stays below 64000.
Shanghai (3614.91, -1.01%) has opened with a sharp gap down near 3600 on heavy tech selling. A decisive break below 3600 will take the index towards 3500 in the coming week.
COMMODITIES
Crude oil prices continue to extend gains, with Brent and WTI advancing toward $116 and $104 respectively. Gold remains under pressure and must defend $4000 support to prevent further drops toward $3900–$3800, while Silver has broken below $52 with room to fall toward $50. Copper has dipped below $6.60 and can decline toward $6.50 as anticipated. Natural Gas continues to consolidate within its $2.7–$3.2 trading range.
Brent ($113.17) and WTI ($102.01) have bounced back in line with our expectations and could rise further towards 116 and 104, respectively, in the near term.
Gold ($4015.90) remains weak and needs to hold above 4000 to negate further downside risks towards 3900–3800 and push higher towards 4200.
Silver ($51.42) has fallen below 52 as expected. A further decline towards 50 and lower can be seen in the near term.
Copper ($6.56) has fallen below 6.6 as expected and could decline further towards 6.5 in the coming sessions.
Natural Gas ($2.90) has fallen and is expected to trade within a range of 2.7–3.2 for some time.
DATA TODAY
23:30 05:00 JP Unemp
...Expected 2.5 % ...Previous 2.5 % ...Actual 2.4%
1:30 07:00 AU PPI
...Expected 1.0 % ...Previous 1.3 % ...Acctual 1.1%
3:00 08:30 BOJ Meeting
...Expected 1.25 % ...Previous 1.25 %
10:00 15:30 EU Unemp
...Expected 6.4 % ...Previous 6.4 %
12:30 18:00 CA GDP
...Expected 0.2 % ...Previous 0.0 %
DATA YESTERDAY:-
----------------
EU Biz Climate
...Kshitij Expn.97.5 ...Expected 97.5 ...Previous 97.5 ...Actual96.9
US Personal Income
...Kshitij Expn. 0.5 % ...Expected 0.3 % ...Previous 0.2 % ...Accctual 0.2%
US PCE Price Index M/M
...Kshitij Expn. 0.3 % ...Expected 0.5 % ...Previous 0.3 % ...Acctual 0.5%
US Core PCE
...Kshitij Expn. 0.2 % ....Expected 0.3 % ...Previous 0.2 % ...Actual 0.3%
US GDP
...Kshitij Expn. 3.0 % ...Exxpected 3.2 % ...Previous 2.2 % ...Actual 2.3%
ECB Mtg
...Expected 2.65 % ...Previous 2.65 % ...Actual 2.65%
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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