GOOD MORNING!
FOREX
The Dollar index could trade above 101 but needs to see whether it can breakout above 102 while Euro has corresponding support at 1.13. USDJPY can slowly rise back towards 159 while above 156 while EURJPY can trade within 181-178 region for the near term. USDINR has mild scope of testing 95.50 while below 96 but looks eventually bullish for a rise towards 96.25/50. Aussie can test 0.69 before reboundung while Pound is bullish above 1.32.
Dollar Index (101.555) is slowly inching higher. It would be crucial to see if it can see a decisive breakout past 101.80-102.
Correspondingly EURUSD (1.1327) has crucial support at 1.13, a break below which is needed for any signals of a medium term barishness to set in. Else we may expect a rebound soon.
Dollar-Yen (158.16) has bounced back after a brief dipnseen yesterday. While above 157, view is bullish for a slow rise to 159.
EURJPY (179.15) is likely to continue trading within the 181-178 region.
EURINR (108.7413) needs to rise back above 109 in the very near term to avoid a decline to 108.
USDCNY (6.7040) can trade within 6.70-6.71 region for the next few days.
Aussie (0.6942) can test 0.69 before rebounding from there in the medium term.
Pound (1.3260) has crucial support at 1.32 above which we may expect a sharp rebound for the medium term back towards 1.34/35.
USDINR (95.82) could have some scope of coming down towards 95.60/50 while below 96. However, an eventual breakout above 96 towards 96.25/50 looks likely in the medium term. The next few weeks can see a broad 1rupee range of 95.50-96.50.
INTEREST RATES
The US Treasury Yields are moving up in line with our expectation. They are coming close to our expected levels. Need to see if a corrective fall is happening thereafter or the upmove is extending. The US PCE rose 3.42% (YoY) in August, up from 3.36% in July. Higher PCE strengthens the case for another rate hike from the Fed. This can continue to support the Treasury Yields. The German Yields have dipped further. Failure to rise back immediately can take them further lower. Thereafter the broader upmove can resume. The 10Yr GoI has risen back well from its low yesterday. The outlook remains bullish. The yield can rise further.
The US 10Yr (5.29%) and 30Yr (5.63%) yields are heading up towards 5.3%-5.35% (10Yr) and 5.65%-5.7% (30Yr) in line with our expectation. Need to see if a corrective fall happens after this rise or the upmove is extending futher.
The German 10Yr (3.58%) and 30Yr (3.93%) Yields come down further. Failure to rise back immediate can take them down to 3.5% (10Yr) and 3.85% (30Yr) first. Thereafter the upmove can resume targeting 3.7% (10Yr) and 4%-4.1% (30Yr).
The 10Yr GoI (7.1879%) has risen back well from the low of 7.1364%. That keeps intact our bullish view to see 7.25%-7.3% on the upside. Support is at 7.15% and 7.1%
STOCKS
Dow has fallen as expected and can decline further towards 51000. DAX remains under pressure below 25500 and can fall towards 25000. Nifty can gradually rise towards 23000 while holding above 22500. Nikkei has turned stronger above 67000 and can rise towards 69000-70000. Shanghai remains positive and can rise towards 3875-3900.
Dow (51359, +0.16%) has fallen below 51500 in line with our expectations and can decline towards 51000 in the near term.
DAX (25230, -0.56%) has fallen sharply as cautioned and can decline further towards 25000 and lower while below 25500.
Nifty (22,590.65, -0.83%) dipped lower after testing a high of 22809. While support near 22500 holds, a gradual rise towards 23000 looks likely in the coming weeks.
Nikkei (68225, +1.62%) has bounced back and broken above 67000, contrary to our expectations. While above 67000, a further rise towards 69000-70000 can be seen in the coming sessions.
Shanghai (3842.19, +0.31%) has moved higher in line with our expectations and can rise towards 3875-3900.
COMMODITIES
Brent and WTI have found support after Russia extended its diesel export ban through October. Gold needs to hold support for a rise towards $4300-$4400. Silver needs to hold $60 for a recovery towards $63-$65. Copper remains weak and can decline towards $6.60-$6.50. Natural Gas risks further downside towards $2.80-$2.60 below $3.00.
Brent ($97.91) and WTI ($90.01) found support yesterday after Russia announced an extension of its diesel export ban through October. This further tightened the global market. While their respective support levels hold, a bounce can be expected in the near term.
Gold ($4193.30) needs to hold above its immediate support to see a rise towards $4300-$4400.
Silver ($61.02) needs to hold above $60 to keep alive the chances of a rise towards $63-$65 in the near term. Otherwise, a break below $60 would trigger further bearishness.
Copper ($6.62) remains weak and can decline towards $6.60-$6.50.
Natural Gas ($2.99) is attempting to break below $3.00. A sustained break below this level would drag the price further down towards $2.80-$2.60.
DATA TODAY
23:50 05:20 JP Tankan Large Manufacturers Index
...Expected 25 ...Previous 22 ...Actuaal24
0:30 06:00 Australia Trade Balance
...Expected 2.00 A$bln ...Previous 1.35 A$bln ...Actual 0.50A$ln
0:30 06:00 JP PMI
...Expected 54.1 ...Previous 54.1 ...Actual 54.1
5:00 10:30 IN Manufacturing PMI
...Expected 55.7 ...Previous 55.7
6:30 12:00 CH CPI
...Expected 0.0 ...Previous0.8
7:30 13:00 CH PMI
...Expected 56.0 ...Previous 57.1
8:00 13:30 EU PMI
...Expected 52.6 ...Previous52.7
8:30 14:00 UK PMI
...Expected 51.4 ...Previous52.0
9:00 14:30 EU Unemp
...Expected 6.4 % ...Previous 6.4 %
13:30 19:00 CA PMI
...Previous 53.0
14:00 19:30 US Manufacturing ISM
...kshitij Expn. 58.3 ...Expected 55.0 ...Previous 54.6
DATA YESTERDAY:-
----------------
CN PMI
...Kshitij Expn.52.1...Expected 51.7 ...Previous 51.5 ...Actual 52.1
UK GDP
...Expected 0.4 % ...Previous 0.6 % ...Actual 0.7%
US Personal Income
...kshitij Expn. 0.1%...Expected 0.5 %...Previous 0.3 % ...Actual 0.2%
US PCE Price Index M/M
...ksshitij Expn. 0.2 % ...Expected 1.0 % ...Previous 0.1 % ...Actual 0.3%
US Core PCE
...kshitij Expn 0.2 % ...Expected 1.0 % ...Previous 0.1 % ...Actual 0.2%
US GDP
...Expected 1.5 % ...Previous 1.48 % ...kshitij Expn.1.48% ...Actual 2.20%
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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