STOCKS
Dow (20812.24, -0.12%) has paused near current levels making a small red-candle after a long rally from levels near 20061 levels. As we have been mentioning for quite some time, we could expect a small corrective dip possibly towards 20600 levels before again bouncing back higher.
Dax (11834.41, +0.10%) has been finding it difficult to move up above 11860 just now and could possibly trade sideways for a couple of sessions before moving up towards 12000.
Nikkei (19222.56, +0.54%) is trading flat but could be ready for a break out in the next few sessions on either side of the 19400-19000 region. In case it breaks lower, it would support the resistance on Dollar-Yen near 113.75. (SEE FOREX SECTION BELOW)
Shanghai (3257.02, +0.47%) is trading slightly higher today. It could move up towards 3275 in the next couple of days. Failure to move above 3275 in the near term could indicate some sideways movement within the 3225-3275 region for some more sessions.
Nifty (8879.60, -0.19%) closed exactly at the 8880 level mentioned as the lower limit of the 8960-8880 range. A close below 8880, if seen today could confirm the start of a near term corrective dip that may extend towards 8800 or lower in the medium term.
COMMODITIES
Gold (1247) has moved lower in line with our expectation and trading within its bullish trading range of 1217-1274. A close below 1230 could hamper its upward momentum.
Silver (18.32) is holding its crucial support of 18, though a possibility of a decline towards 18 levels can’t be ruled out.A close below 17.80 could be trend reversal.
Copper (2.71)was unable to close above its pivot of 2.75 of its recent trading range of 2.60-83, though it is still holding its upward trend line support at 2.68-70 since October 16. We have US ISM Manufacturing PMI data at 8.30 p.m IST, which could influence the price of copper and silver.
Brent (55.59) and WTI (54.11) both are trading within their narrow ranges of 55-57.60 and 53-55 with no directional bias. We have US Crude oil inventory data at 9.00 p.m IST.
FOREX
Trump’s speech in support of cutting taxes for the American corporate companies and spending more on the crumbling infrastructure could be taken positively by the markets. (To read the full speech click here: http://www.vox.com/2017/2/28/14772568/trump-speech-congress-transcript)
Dollar Index (101.33) tested levels near 101.57 ahead of the speech but could possibly move up in the opening session tonight.
Euro (1.0577) is holding within the 1.055-1.065 region and could possibly come down below 1.055 in the next couple of sessions. Near term looks weak. (REFER TO INTEREST RATE SECTION BELOW)
Dollar-Yen (112.96) is trading a bit higher today. Immediate resistance is seen near 113.75 which if holds could possibly push Dollar-Yen towards 112.00. A break above 113.75 is needed to turn bullish on Dollar-Yen. Keep a close watch on Nikkei, which if breaks on the downside could bring down Dollar-Yen also to lower levels.
Pound (1.2376) is on the verge of breaking below the immediate support at 1.2382 mentioned yesterday. While it sustains at lower levels, we could see a fresh fall towards 1.230 in the near term. (ALSO REFER INTEREST RATE SECTION BELOW)
Aussie (0.7665) is holding above immediate support at 0.7625 and has tested 0.77 on the upside. Trade within 0.7625-0.7750 could be expected for the next couple of days. Overall broad range of 0.7600-0.7750 holds for the medium term.
Dollar-Rupee (66.69) could possibly open higher on the onshore markets today. But overall range of 66.90-66.70 may hold today also.
INTEREST RATES
The German-US 2Yr (-2.21%) has fallen sharply but we are yet to see a fall in the Euro. The close correlation between the differential and currency indicates that the Euro may possibly see a sharp fall towards 1.05 or lower in the next few sessions. The German-US 10YR (-2.20%) is also sharply down from levels near -2.13% seen on Monday.
The US-UK 10Yr (-1.27%) has also been falling sharply, indicating a faster fall in Pound. Investors need to be cautious on a sharp fall in Pound in the near term towards 1.23-1.22 levels.
The US yields have risen some more. The 5Yr (1.96%), 10YR (2.41%) and the 30YR (3.01%) are sharply up from previous levels of 1.87%, 2.36% and 2.97% respectively. But on a medium term, the crucial long term resistances may hold, pushing back the yields to lower levels soon.
The US10-5Yr yield spread (0.45%) is down sharply from levels near 0.50% but could bounce back from immediate support near 0.44%.
