GOOD MORNING!
FOREX
Currencies look mixed. The Dollar Index looks bearish while Euro could continue to rise towards 1.17. USDCNY, USDJPY and EURJPY looks bearish while EURINR can rise towards 112 in the coming days. Aussie and Pound look bullish for the near term. USDINR rose to close above 95 yesterday. An initial decline towards 94.50 can be expected before the medium to long term uptrend resumes.
Dollar Index (98.744) looks stable within 98.60-99.00 but overall there is scope for an initial dip to 95.50. Thereafter, a break below 98.50, if seen would open up chances of a further decline towards 98.00-97.60. Correspondingly, EURUSD (1.1639) is bullish towards 1.17 in the next few sessions.
Dollar-Yen (153.60) could test 152 in the near term and a decisive break below that, if seen would turn further bearish towards 150-148 before an eventual rebound is seen in the medium term. EURJPY (178.67) looks bearish for the medium term towards 175-174.
EURINR (110.67) tested 110.87 before coming off slightly from there. A decent rise towards 112 looks possible within the current upmove before a decline is seen from there in the medium term.
USDCNY (6.7074) looks stable just now near current levels but has scope to test 6.70 soon. View remains bearish.
Aussie (0.7209) seems to be coming off from 0.7250 just now but overall while above support at 0.71, Aussie has fair chances of rising towards 0.73-0.7350 in the medium term.
Pound (1.3548) on the other hand has fair scope for a rise towards 1.37-1.3750 while above 1.3480.
USDINR (95.11) tested an intraday high of 95.2225 in line with our expectation before it closed at 95.11. If 95.25/30 acts as immediate resistance for the near term, we may expect a correction towards 94.50 in the coming days before an eventual bounce takes place to resume longer term uptrend.
INTEREST RATES
The US Treasury and the German Yields have risen sharply yesterday. Both the Treasury and the German Yields look strong and have room to rise more from here. The ECB meeting outcome today evening and the US CPI data release tomorrow are important events to watch for. The 10Yr GoI remains stable and is hovering around 6.95%. While a narrow movement can continue for some more time, the upside is open to see more rise eventually.
The US 10Yr (4.84%) and 30Yr (5.29%) yields have risen well. The bullish view is intact. A rise to 4.9%-5% (10Yr) and 5.4% (30Yr) can be seen from here. Support is at 4.75%-4.73% (10Yr) and 5.2% (30Yr).
The German 10Yr (3.44%) and 30Yr (3.88%) Yields have risen sharply. The rise to 3.5% on the 10Yr is happening much faster than expected. An extended rise to 3.6% is also a possibility. The 30Yr has room to see 4%-4.1%.
The 10Yr GoI (6.9568%) is oscillating around 6.95%. A break above 7% and a rise to 7.1%-7.15% is still a possibility. This rise will get negated only on a fall below 6.9%.
STOCKS
Dow remains weak near 52500, with a break below this level opening the way towards 52000. DAX has weakened amid rising Middle East tensions and can fall towards 25000. Nifty remains under pressure below 23500 and can open near 23200 and decline towards 23000. Nikkei needs to hold above 64000 for a bounce towards 67000-68000. Shanghai remains range-bound between 3850-4000 while below 4000.
Dow (52541.23, +0.22%) has fallen to levels near 52500. A break below this level would drag the index further down towards 52000.
DAX (25559.46, -0.01%) has fallen sharply amid rising conflicts in the Middle East, triggering a sell-off. The index plunged to a low of 25530. A further fall towards 25000 can be seen in the coming sessions.
Nifty (23,431.50, -0.86%) fell below 23500 and tested a low of 23431 yesterday. It can see a gap-down opening near 23200 and fall towards 23000 in the coming sessions.
Nikkei (64325.18, +0.32%) has dipped and needs to hold above 64000 to see a bounce back towards 67000-68000.
Shanghai (3941.65, -0.25%) can continue to trade within the range of 3850-4000 for some time while below 4000.
COMMODITIES
Brent and WTI have surged amid the escalating US-Iran conflict, with further gains towards $105-$110 and $100-$105 possible. Gold remains positive above $4300 and can rise towards $4600. Silver needs a sustained break above $70 for a move towards $75-$80. Copper has broken above $6.80 and can rise towards $7.00 and higher if sustained. Natural Gas is testing $2.80 support, with a break below it opening the way towards $2.70-$2.60.
Brent ($101.34) and WTI ($96.76) have surged amid the escalating US-Iran conflict. A further rise towards $105-$110 and $100-$105 respectively can be seen in the near term.
Gold ($4455.70) has risen and needs to sustain above the support near $4300. This would keep alive the chances of a rise towards $4600.
Silver ($67.96) needs a sustained break above $70 to move higher towards $75-$80.
Copper ($6.85) has surged above $6.80 and needs to sustain above this level. This would support a further rise towards $7.00 and higher.
Natural Gas ($2.7980) has fallen to the lower end of the mentioned range. It needs to hold above $2.80 to maintain the $2.80-$3.00 range. Otherwise, it can decline towards $2.70-$2.60.
DATA TODAY
11:45 17:15 ECB Mtg
...Expected 2.65 % ...Previous 2.40 %
12:30 18:00 US PPI
...Kshitij Expn 0.3 % ...Expected 0.4 % ...Previous 0.0 %
12:30 18:00 US PPI ex Food & Energy (MoM)
...Kshitij EXpn. -0.1 ...Expected 0.3 ...Previous 0.2
14:00 19:30 US Existing Home Sales
...Kshitij Expn.4087 K ...Expected 3980 k ...Previous 4060 K
DATA YESTERDAY:-
--------------
CN CPI (YoY)
...Expected 0.8 ...Previous 0.5 ...Actual 0.8
CN PPI
...Expeccted 3.6 ...Previous 3.5 ...Actual 3.8
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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