STOCKS
No huge movements yesterday (understandable), but a hardworking day for the Bulls nevertheless. They still have an uphill task in the face of growing concern of a global slowdown. Big question is, how much of that is already priced into the markets?
A small positive close on the Dow (24597.38, +0.29%) after a relatively indecisive, less volatile, but possibly bullish day.
The Nikkei (21816, +0.99%) saw a recent rise yesterday. It night slowly try to break above 22000-22500 while it remains above 21000.
Good, respectable rise in the Shanghai (2634) also yesterday, testing crucial Resistance at 2650 and raising chances of a good upmove towards 2700 also, if it manages to remain above 2600 through next week.
It will be interesting to see what the Nifty (10791.55) does today, as it has tested but closed below super-crucial Resistance at 10850. We are allowing for a dip towards 10300, but a break above 10850 will be a strong bullish statement.
The DAX (10925, -0.04%) closed largely unchanged yesterday. It still remains the most vulnerable to bearishness while below 11200.
COMMODITIES
News states fall in stockpiles at a delivery hub in Oklahoma while the supply deficit is projected for the second quarter of 2019 by the IEA.
Brent (60.98) is almost stable while WTI (52.36) has risen slightly. Some rise in the crude prices look likely in the medium term as technically there is not much room on the downside below 58 and 56 respectively for Brent and WTI.
Gold (1246.30) and Silver (14.78) are stable just now. Copper (2.7515) is headed towards 2.85/88 in the near term from where a fall could be expected.
FOREX
Currencies continue to trade in the narrow range. Some contraction is likely to be seen next week before sharp movements come in.
Dollar Index (97.17) could see 2-3 sessions of contraction within 97.30-96.75 before breaking sharply on either side.
Euro (1.1358) is trading near resistance at 1.14 and the currency is likely to come off in the near term towards 1.13-1.12. As mentioned earlier, 1.15-1.12 is the range for the next 1-2 weeks.
Dollar Yen (113.48) rose towards 113.71 yesterday but has dipped a bit from there. 21-Day MA is seen near 113.10 and while that holds, a rise towards resistance at 114 is possible before coming off from there back towards 113.0-112.5 levels.
Euro-Yen (128.90) came off from 129.25 yesterday. While Dollar Yen and Euro are trading in a narrow sideways zone, Euro-Yen is also likely to remain ranged within the 128.0-129.6 region. 129.50/60 is an immediate resistance and while the pair trades lower, a test of 128 is possible pulling down Euro also towards 1.13-1.12.
Pound (1.2625) has dipped slightly as expected. While below 1.27, a fall towards 1.25-1.24 is on the cards.
Aussie (0.7185) has come off sharply and could head towards 0.71-0.70 in the near term if it breaks below 0.7150.
Dollar Rupee (71.69) could see a test of 71.45 today from where a decent bounce back towards 71.80 is possible. The NDF quotes lower at 71.53 just now.
INTEREST RATES
US 10-2 spread steepened a little more to +14bp, as the 2Yr dipping a bit to 2.76% while the 10Yr remained stable at 2.90%. However, the 5-2 spread inverted again to -2bp (from 0% a day ago) as the 5Yr dipped to 2.74%. Seems Curve Steepening is an uphill task as the global slowdown theme is still very strong.
Both the ECB and PBOC also talked about slower growth.
The ECB left rates unchanged, said bond purchases will come to an end this year, maturity proceeds will continue to be invested back and interest rate increases are still a long way off.
In a welcome development, the Italian bond yields dropped a decent bit as Italy came up with a smaller than expected budget deficit.
The 10Yr GOI (7.4082%) has dipped as expected. A break below 7.40% if seen would take the yield lower towards 7.20% in the near term. Else some ranged movement in the 7.40-7.60% region is possible.
