STOCKS
The unexpected Trump-Xi patchup of sorts yesterday has triggered a strong pick-up in the Shanghai (2643, +2.14%) and the Nikkei (22634, +1.28%) today. Most Equity indices are expected to do well today, but still need to break above some important Resistances in order to move onto higher ground.
However, there is important Resistance at 2650 to be reckoned with on the Shanghai for today-tomorrow. A break thereof is needed to negate whatever little chances of a fall towards 2500-2450 might be left.
Decent rally in the Nikkei (22634, +1.28%), past 22500. Might target 23000 if it sustains.
The Nifty (10876.75, +18.05, +0.17%) is quoted at 10976 in line with our expectation of a test of 11000 for today. It might now enter into a bit of a sideways consolidation before an eventual break above 11000. Overall, India is outperforming the USA and China just now.
The DAX (11257.24, -40.99, -0.36%) had been subdued/ consolidative on Friday as well. Maybe it will now pick up today to rise towards 11600 as expected.
Friday had seen a decent rise in the Dow (25538.46, +199.62, +0.79%), and can move up some more today as well, but has important Resistance at 25750-60, which could trigger some profit-taking as well.
COMMODITIES
Major commodities are trading higher today, starting the month on a positive note.
Crude prices have risen possibly on news of a 90-day pause on additional trade tariffs between China and USA. Markets expect announcement of oil supply cuts by OPEC in its meeting with Russia on 6th Dec. Before that we may see some positive trades in the Crude this week.
Brent (62.45) and WTI (53.75) are trading in the green and could be in a possible sideways mode, indicating that the fall in the current downmove could be over. While Brent remains above 62, it could move higher to test 64-65 in the near term. WTI could be headed towards 55-56 just now.
Gold (1229.10) has been strangely trading very narrow and almost stable for an extended session contrary to expectations. Difficulty to break above 1230 is a concern just now and could be vulnerable to another fall back to 1210-1200. Medium term direction of whether the price could remain above 1230 or move higher towards 1250 may be decided by this week or latest next week without further extension of the current sideways range-move.
Silver (14.36) is trading just at immediate resistance on the daily chart. While the resistance holds, we could see a dip back towards 14.00-13.75 in the near term before eventually breaking on the upside towards 15.
Copper (2.8460) has come up sharply and could test immediate resistance near 2.85. This is crucial level to keep an eye on as a break above 2.85 on the upside would boost further upmove in the longer run towards 2.90 or even higher. But a failure to break above 2.85 could again push the price back towards 2.65/70 in the next 1-2 weeks. Preference is for an upmove above 2.85.
FOREX
Some relief has set into the markets after news stated a pause in introduction of new tariffs as US-China trade talks are likely to intensify. This has helped in lifting up the market sentiment which had been weighed down by the US-China trade war tensions that could lead to economic slowdown.
Almost all currencies are trading weak against the US Dollar except Aussie.
Dollar Index (96.96) is overall in an uptrend. 96.60/50 are important support levels that could pull back the index towards 97.50-97.75 in the near term.
Euro (1.1351) is trading in the narrow 1.13-1.14 region on the daily candles. While resistance at 1.14 holds, Euro looks sideways to bearish for the near term.
Dollar Yen (113.60) has come off from levels just below resistance at 114 and while that holds, Dollar-Yen looks bearish towards 113. Immediate view is bearish.
Pound (1.2770) is trading sideways just above important support at 1.27. In the near term, 1.27 is likely to hold pushing the index higher towards 1.2850.
Aussie (0.7358) saw a sharp gap up opening breaking above the immediate resistance near 0.7350. While the currency trades higher above 0.7350, a further rise towards 0.7345 is on the cards for the near term. View is bullish.
Dollar Rupee (69.60) is likely to hold above support at 69.40 today and eventually move towards 70 and higher in the near term. After the recent and sharp fall in the last couple of weeks, some sideways to upward correction is possible now in the near term.
INTEREST RATES
US Yields (2Yr 2.83%, 5Yr 2.87%, 10Yr 3.04%, 30Yr 3.33%) do not seem to be breaking below important Supports like 2.80% on the 2Yr and 3.00% on the 10Yr yet. With Crude seeing a good rally today, we have to see if the US Yields also see a bit of a rally ahead of the FOMC, now that Powell’s speech and the FOMC Minutes are past.
The Indian 10Yr GOI (7.6066%) is still trending lower, albeit at a slower pace, and may still target 7.55%, taking the Indo-US 10Yr Spread (4.6136%) lower as well.
