STOCKS
Dow Jones (24999.67, -15.19, 0.061%) dipped down few points below the crucial resistance 25000. If the resistance holds well, then the earlier negated bearishness towards 24000 could still be possible. While a break above it could be very bullish in the coming sessions.
Dax (11173.10, -8.56, -0.077%) saw a slight dip, but continues to trade well above the immediate support at 11000. Chances of a fall to 10900 could be negated for now. Whereas the 21-MA at 11400 looks as a strong resistance on the Weekly line chart which could bring bearishness in the coming week.
Shanghai (2604.65, +20.07, +0.78%) rallied above 2580 against our expectations yesterday. It may test the resistance at 2650 followed by a fall at 2575 in the coming 2-3 session. Thus it could range sideways between 2650-2575 for some days.
Nikkei (20797.24, +23.75, +0.11%) saw a rally towards the immediate resistance 21000. While that holds the index could be pushed towards 20400 and lower in the medium-term in line with expectation.
Contrary to our expectation both Sensex (36256.69, +665.44, +1.87%) and Nifty (10830.95, +179.15, +1.68) saw a rally upwards above the support turned resistance at 35600 and 10670 respectively. Rise till 36600 and 11000 could be seen followed by bearishness in next few sessions.
COMMODITIES
Overall commodities are stable today after a sharp rise seen yesterday. Although there is more scope on the upside for Gold, silver and Copper, we could see some interim dips before an eventual rise. Crude prices could spend some time in a sideways range while immediate resistances hold.
Gold (1323) and Silver (15.99) are almost stable today and has not seen follow through after the rise yesterday. Gold could gradually head towards 1330-1350/60 in the medium term while Silver could test immediate resistance near 16.50/55. Near term looks fairly bullish but we may expect some interim dips early next week.
Copper (2.7680) has come off a bit but has scope for a rise towards 2.80/85 while above 2.75. Only if a sharp fall back to levels below 2.75 would delay the rise in the medium term.
Brent (60.90) has dipped from levels near 62.02 seen yesterday and WTI (53.75) has also come off from 54.60. There is a possibility of seeing some sideways ranged movement below 64 on Brent and 56 on WTI.
Brent could spend some time within 64-59 while WTI could range in the 50-54 region.
FOREX
Dollar Index (95.61) recovered a bit from 95.16 itself and while the support near 95 holds, the current bounce could take the index towards 96.15. The current rise is probably an interim corrective upmove before another fall is seen in the medium term.
Euro (1.1442) has come off from 1.1514 itself on corrective rise seen in the dollar Index. However, we have immediate support now at 1.14 and while that holds, we could see another leg of a rise above 1.15 in the near term.
Euro-Yen (124.59) could trade above 124.0-124.2 in the near term attempting to rise towards 125-126 levels in the near term. View is bullish for Euro-Yen.
Dollar Yen (108.89) has scope for a fall towards 107.70 on the downside but we may not expect a fall below 108 just now. The pair could soon bounce back towards 109.50-110.0 in the near term.
Pound (1.3097) has dipped and could test 1.30 support on the downside before rising back from there. A dip below 1.30, if seen and sustained could possibly turn negative for the longer term.
Aussie (0.7244) tested 0.73 yesterday and has dipped from there as expected. A fall towards 0.72 could be seen. While other currencies could appreciate against the US Dollar, Aussie could attempt a rise towards 0.7350-0.7400 in the medium term.
USD-CNY (6.7288) rose back contrary to our expectation of falling towards 6.65. Although near term support is visible at 6.65, the sharp recovery seen today could keep the upside momentum intact for a few sessions taking the pair higher towards 6.74-6.76.
Dollar Rupee (71.0850) could trade lower today aided by a lower 10Yr GOI (7.4829%) yesterday and a stronger Brent crude (60.90). A re-test of 70.90/80 could be seen while upside could be limited to 71.25.
INTEREST RATES
As expected, there has been a further decline in US yields yesterday. 2Yr down to 2.47% from 2.50%; 5Yr down to 2.45% from 2.48%; 10yr down to 2.64% from 2.68% and 30Yr down to 3.01% from 3.03%.
The 5Yr (2.45%) has broken below the rising trendline coming up from 0.9% in Jul-16 and may now move further lower towards 2.40%. The Curve has steepened at the Far end with the 30-5 Spread (0.56%) rising 1bp more from 0.55% on Wednesday. It may soon find Resistance near 0.60%. The 30-10 Spread (0.37%) also may find Resistance near 0.39% and the 10-5 Spread (0.19%) may find Resistance near 0.22%.
What this means is that the Far end of the Curve may also start falling faster in another few days.
Finally, Indian yields have come down along with US yields with the 10Yr GOI down to 7.4829%, down from 7.5515% the day before. This can help the Rupee to strengthen.
