STOCKS
Dow has risen sharply as expected and while the momentum holds, a rise to 35000 or higher looks possible next week. Dax has risen but does not look very strong just now and may again face a decline in the coming week. Nikkei and Shanghai have risen. Nikkei can head towards 28500-29000 while Shanghai looks bullish while above 3550. Nifty and Sensex have risen yesterday and could be slowly headed towards 17800-18000 and 60000 respectively.
Dow (34754.94, +337.95, +0.98%) finally rose to the upper end of our mentioned range yesterday, bouncing sharply from 33750 levels. A break above 34750 is needed to sustain in order to see further upmove towards 35000 or higher.
DAX (15250.86, +277.53, +1.85%) opened with a sharp gap up but closed lower yesterday. There is enough room on the upside to 15400/500 but while below 15200/250, a dip back to 15000 cannot be negated. Watch price action near current levels.
Nikkei (28275.52, +597.31, +2.16%) has risen sharply today. While above 28000, we continue to look for an eventual rise towards 28500/29000.
Shanghai (3588.25, +19.59, +0.55%) opened above 3600 today and is slowly coming down from there. While above 3550, we continue to look for a rise towards 3600 and eventually towards 3700.
Nifty (17790.35, +144.35, +0.82%) continues to rise within the 17600-17800 range and a break above 17800 is needed for the index to turn further bullish. Till then we may expect the mentioned range to hold.
Sensex (59677.83, +488.10, +0.82%) rose well yesterday. The index is slowly rising towards 60000.A strong break above 60000 is needed for the view to be bullish towards 61000, else a fall back towards 59000 is possible.
COMMODITIES
Crude prices drooped yesterday as the US Crude inventory stocks rose by 2.3mln barrels against expectations of a dip of 418,000 barrels. But the decline was short lived and news based as the prices have again shot up today indicating its intrinsic bullish potential to rise higher. However, we watch closely the immediate resistances on Crude prices. Gold and Silver are stable while Copper has risen sharply breaking above our mentioned 4.25 and could now be headed towards 4.35/40 on the upside.
Brent (83.00) and WTI (79.38) have risen yet again and in case they manage to sustain above 83 and 80 respectively, we may see a rise towards 85 and 82/83 respectively on Brent and WTI. Watch immediate resistance near 83 on Brent and 80 on WTI to see if they manage to hold and push the prices down from here itself.
Gold (1759.90) and Silver (22.52) remain stuck near same levels for the past few sessions and unless any movement on either side is seen, prices may remain stable within 1740-1780 and 21.50-23 region.
Copper (4.2770) has risen sharply breaking above our mentioned 4.25 yesterday. View is now bullish to see a rise towards 4.35\40.
FOREX
Dollar Index looks bullish towards 94.75 that can drag down Euro towards 1.1550-1.1495 in the near term. Aussie and Pound are headed higher slowly but need to break above interim resistances to move higher. EURJPY is stuck within the 128-130.50 range. USDCNY has moved up today and could be slowly headed higher. USDINR may rise today to 75 or higher as Euro weakness alone with higher crude prices may indicate Rupee weakness.
Dollar Index (94.237) can test 94.50-94.75 while above 94. Immediate range of 94.75-94.00 may hold for the next few sessions.
Euro (1.1552) is bearish while below 1.16 and can fall towards 1.15 before bouncing back from there. As mentioned yesterday, a dip to 1.1550-1.1495 looks possible in the next few ssessions.
EURJPY (129.213) can rise towards the upper end of the 128-130.50 range and unless a break above the range is seen, we may expect a fall back to 129 in the medium term after a test of 130.0-130.50.
Dollar-Yen (111.86) has risen and may rise towards 112-112.50 on the upside before falling off from there.
Aussie (0.7312) trades above 0.73 and can rise to test immediate resistance near 0.7350 which if holds can produce a fall towards 0.72 in the near term. A break above 0.7350 is needed for Aussie to rise further towards 0.74-0.7450 in the medium term.
Pound (1.3607) has enough room on the upside to rise on a break above 1.3650 but while it finds difficult to rise above 13650, we may expect a ranged movement within 1.3650-1.35 for the near term. We would look for an eventual break above 1.3650 to head towards 1.37/38 eventually in the next 1-2 weeks.
USDCNY (6.4511) has risen a bit and could be headed towards 6.46 in the near term.
USDINR (74.78) came off yesterday on fall in crude prices. With weakness seen in Euro today and crude prices back to higher levels, USDINR may rise today to attempt a test of 75 or higher.
INTEREST RATES
The US Treasury Yields have risen further sharply especially at the far-end. Key resistances are ahead for the 10Yr and 30Yr which we expect to hold. But if broken, a further rise is possible and our view of seeing a reversal will get negated. The US nonfarm payroll and the unemployment data release today will need a close watch. The German yields remain stable and higher. They have room to rise further from here to test their resistances and then can see a fresh fall. The 5Yr and 10Yr GoI are keeping alive the chances of seeing a further rise from here and test their resistances before witnessing a reversal.
The US 2Yr (0.31%) Treasury yield remains stable while the 5Yr (1.03%), 10Yr (1.59%) and the 30Yr (2.15%) %) have risen further. The 10Yr is just below the crucial resistance level of 1.6% while the 30Yr has room to test 2.2% from here. We expect a reversal from the levels mentioned above. But a strong rise past 1.6% (10Yr) and 2.2% (30Yr) will be bullish to see further rise which in turn will negate our view of seeing a reversal. The price action in the coming sessions will need a close watch.
The German 2Yr (-0.72), 5Yr (-0.56%), 10Yr (-0.19%) and 30Yr (0.30%) yields remain higher and stable. The yields can move up to -0.1% (10Yr) and 0.35% (30Yr) from here. But thereafter we expect them to reverse lower and see a fresh fall resuming the long-term downtrend.
The Indian 10Yr GoI (6.2674%) remained stable yesterday. There is room to test 6.3%-6.32% on the upside while the 10Yr sustains above 6.26%. But we reiterate that 6.32% is a strong resistance which can cap the upside and drag the yield lower to 6.2% and even lower in the coming weeks.
The 5Yr GoI (5.7125%) had risen back sharply after testing the support at 5.68% yesterday. As mentioned yesterday, a sustained break above 5.72% can take the yield up to 5.75%-5.76% and even 5.8% in the near-term. Thereafter a reversal is possible. For now, 5.68%-5.72% seems to be the range of trade. Also, the 5Yr will have to break below the 5.68%-5.66% support zone to become bearish.
