STOCKS
Overall equities look fairly bullish. Dow has scope to rise towards 36750-37325 while above support at 36250 while Dax can rise to 16400. Nikkei can head towards 31000 and Shanghai has scope to rise to 3550. Nifty and Sensex are bullish towards 18200/500 and 61000/62000 respectively while above immediate supports.
Dow (36432.22, +104.27, +0.29%) rose well to test 36566 yesterday in line with our expectation of a rise towards 36750-37325 on the upside. Watch support near 36250 above which the index is bullish.
DAX (16046.52, -7.84, -0.049%) has been stable and can test 16400 on the upside before we see a reversal from there.
Nikkei (29536.17, +29.12, +0.099%) went up to test 29750.46 before coming down. The view is still bullish to see a test of 30000/31000 on the upside. A strong break below 29500 will be needed to negate out bullish view and instead be bearish towards 28000.
Shanghai (3493.55, -4.91, -0.14%) has been stable but can soon head towards 3550. However, if a fall below 3475/3450 if seen can turn the view bearish towards 3400.
Nifty (18068.55, +151.75, +0.85%) managed to rise after falling sharply yesterday. A sustained rise above 18000 is needed for the view to be bullish towards 18200/500, else the range of 18000-17600 can continue.
Sensex (60545.61,+477.99, +0.80%) has risen and while above 60000, it looks bullish towards 61000/62000 eventually.
COMMODITIES
Crude prices could dip a bit but is likely to remain in a range for the near term. Gold and Silver are bullish towards 1835/50 and 25. Copper needs to rise above 4.45 to turn further bullish else can decline back to 4.25/20.
Brent (83.49) and WTI (82.00) have resistances near 84 and 83 respectively and has scope to dip towards 80 and 81 in the near term.
Gold (1825.10) and Silver (24.30) are rising well and Gold has scope to test 1835/50 while above 1820. Silver on the other hand is bullish too towards 25.
Copper (4.3930) has risen slightly but could face rejection near 4.45 to push the price back towards 4.25/20. Only a sustained break above 4.45 can take it higher to 4.50/60 on the upside.
FOREX
US Dollar retreated a bit pulling up Euro towards 1.16. Note that 1.16-1.1650 is a good resistance zone and is likely to hold in the near term producing a fall back to 1.1550-1.15. EURJPY, Aussie and Pound look bearish for the near term. USDCNY has fallen and could test 6.3750 before bouncing back from there. USDINR has scope to test 73.90/80 initially before a bounce to 74.20/25 is seen. On the downside there is scope for a fall to 73.50 in the medium term. Dollar-Yen has fallen too and a break below 113, if seen will trigger more bearishness going forward.
Dollar Index (94.042) has fallen surprisingly, as 94.62 is holding as a decent resistance for now. A dip to 93.80/75-93.50 is likely before a bounce back is seen.
Euro (1.1583) has bounced well from levels just above 1.15 but on the upside, Euro is likely to be limited to 1.16-1.1650 before again falling from there. A broad range of 1.15-1.16/1.1650 may hold for the near term.
EURJPY (130.92) has fallen well and could test 130.50 on the downside if the fall sustains. Overall near to medium trend looks bearish for now.
Aussie (0.7403) looks bearish for a dip to 0.7350 or even lower in the medium term.
Pound (1.3556) is holding well above 1.34 but failure to rise above 1.36 can again bring it down to 1.34-1.33 in the medium term. Broad range of 1.37-1.33 may hold for a couple of weeks.
Dollar-Yen (113.06) fell sharply as the US Dollar weakened. The pair has broken below 113.25 and a sustained decline below 113 will indicate that a near term top is in place and could be bearish towards 112.55-112 in the medium term.
USDCNY (6.3892) has dipped and could head towards 6.3750, the crucial support below current levels. If that holds, a bounce back again towards 6.40/42 is possible on the medium term.
USDINR (74.02) fell sharply yesterday and has scope to test 73.90/80 before again bouncing back from there towards 74.20/40/50 in the near term. Looking at a broader picture, a range of 73.50-74.50 can hold for the next 1-2 weeks with a sell-on rallies environment.
INTEREST RATES
US Treasury Yields have bounced-back slightly. They have room to test their key short-term supports in the coming days and then can see a bounce-back move. We expect the yields to remain in a broad sideways range for some time. The German yields keep our bearish view intact and can fall further in the coming days. The 10Yr and 5Yr GoI have declined sharply yesterday and can remain under pressure for a further fall from here.
The US 2Yr (0.43%), 5Yr (1.10%) and the 10Yr (1.48%) Treasury yields have bounced a bit while the 30Yr (1.86%) has dipped further. As mentioned yesterday a dip to 1.4%-1.35% (10Yr) and 1.8%-1.75% (30Yr) can be seen in the coming day. Thereafter a bounce-back move is possible. Broadly we now look for a range of 1.35%-1.65% (10Yr) and 1.75%-2.1/2.2% (30Yr)
The German 2Yr (-0.74%), 5Yr (-0.56%), 10Yr (-0.25%) and the 30Yr (0.11%) have recovered slightly after having seen a sharp fall last week. The bearish view is intact. The 10Yr can fall to -0.3% and -0.4% while below -0.2%. The 30Yr can test 0.05%-0% and then see a corrective bounce to 0.1% before seeing a fresh and deeper fall below 0%.
The India 10Yr GoI (6.3006%) and 5Yr (5.6675%) have declined sharply yesterday. The 10Yr is at the lower end of its 6.3%-6.4% range. Our view of seeing a break below 6.3% and a fall to 6.2% and lower levels remain intact. The 5Yr has come down towards 5.66% as expected after breaking below 5.7%. It has room to test 5.62%-5.6% on the downside now while below 5.7%.
