STOCKS
Equities look bullish overall. Dow Jones and Dax have room to rise towards 37000 and 16100 respectively while Nikkei can rise towards 29500 and Shanghai can consolidate between 3600-3650. Nifty and Sensex also look bullish towards 17800 and 60000.
Dow (36,585.06 +246.76 , +0.68%) has risen sharply. The view is bullish towards 37000 in the coming 1-2 weeks.
DAX (16020.73, +135.87, +0.86%) has risen above 16000 and can now target 16100-16200 in the coming sessions. Immediate view is bullish.
Nikkei (29,193.56 +401.85 , 1.40%) has risen again today. While above 29000, a test of 29500 is possible. Further rise from 29500 will open up opportunities to rise towards 30000/31000.
Shanghai (3,612.45 −27.32 ,0.75%) has dipped again today. A consolidation between 3600-3650 is possible now, before we see a break on either side.
Nifty (17625.70 ,+271.65 +1.57%) rose sharply yesterday and has room to rise towards 17800 in the coming sessions while it sustains above 17600.
Sensex (59183.22, +929.40 , 1.60%) has risen above the crucial level of 59000. The view is now bullish to see a rise towards 60000.
COMMODITIES
Crude prices are higher ahead of the OPEC+ meeting and may be limited to 81 (Brent) and 78 (WTI) on the upside before declining soon. Gold and Silver have fallen from higher levels seen yesterday but we need to see if the fall is short lived or manages to fall further from current levels. Copper has dipped too but can bounce back from 4.30.
Brent (78.99) and WTI (76.07) trade higher ahead of the OPEC meeting scheduled today where it is expected to continue easing of collective production cuts by around 400,000 bpd from next month. Libyan oil production may face reduction due to damage in an oil pipeline. Bullishness in oil prices also came in after the OPEC+ stated that it expects surplus on oil market in the first quarter of 2022 at 1.4mbpd. On the charts, both Brent and WTI can be limited to 81 and 78 respectively just now before a decline sets in.
Gold (1806.20) and Silver (22.85) have both fallen sharply from higher levels seen yesterday. While above 1800 and 22.50 respectively, there can be scope for another rise towards higher levels of 1850 and 23.50 respectively. For now, 1830 and 23.50 are immediate resistances above current levels.
Copper (4.3870) has dipped slightly but while above support at 4.30, we may expect a bounce back towards 4.45/50 soon. A range of 4.50-4.30 may hold for a few sessions.
FOREX
Dollar Index may trade within 95.50-96.50 for now while Euro has scope to rise towards 1.14 or higher. EURJPY can rise towards 131-132 while above 130.50. Aussie and Pound look bullish for the medium term. Dollar Yen needs to break above 115.50 and sustain to eventually rise towards 116-118 on the upside. USDCNY has risen well and can remain within 6.35-6.38 for now. USDINR too can be ranged within 74.80/60-73.75/74.00
Dollar Index (96.218) bounced back from levels above 95.50 itself instead of falling further down. While above 95.50, there is scope for a rise to 96.50 or even 97 on the upside. Narrow range of 95.5-96.5 and broad range of 95-97 may hold for now.
Euro (1.1346) has risen from the lower end of the 1.1258-1.1450 range and can slowly move up to the upper end of 1.14-1.1450 soon before declining again from there. Immediate view is bullish while above 1.1258-1.1300.
EURJPY (130.63) continues trade above 130 and while it sustains to move up further, a test of 131-132 can be possible soon.
Aussie (0.7199) fell sharply yesterday but has bounced today from immediate trend support near 0.7180. While above the mentioned support, a rise towards 0.7280-0.73 is possible.
Pound (1.3473) has fallen and can test 1.34 before again bouncing back towards 1.36 on the upside.
Dollar-Yen (115.48) has risen well to the previous high of 115.52 seen on 24th Nov 2021. A break above 115.50 if seen and sustained in the coming sessions would be bullish for a rise towards 116-117-118 eventually before any reversal is seen in the longer run.
USDCNY (6.3707) rose back sharply to 6.37 from levels below 6.36 seen yesterday. We may expect a range of 6.3825-6.3400 to hold for the next few sessions. Unless a break on either side is seen, it would be difficult to say which way it would finally move towards in the longer run. While below 6.39/40, view would continue to remain bearish.
USDINR (74.2650) has important resistance near 74.60/80 region and while that holds, the pair can trade within 74.60-74.00/73.75 for the near term with higher possibility of a fall towards the lower end of the mentioned range. Watch price action for a break on either side of the mentioned range for clarity on further directional move if any. Till then the mentioned range may hold.
INTEREST RATES
The US Treasury yields have surged across tenors and are coming closer to their crucial range resistances. The price action in the coming days will need a close watch to see if the yields are reversing lower from their resistances and keep the sideways range intact. The German yields are moving up in line with our expectation. Strong resistances are coming up which can halt the current rally and drag the yields lower again. The 10Yr GoI remains stable within its narrow range while the 5Yr GoI remains slightly weak to see a dip in the near-term.
The US 2Yr (0.77%), 5Yr (1.35%), 10Yr (1.62%) and the 30Yr (2.01%) Treasury yields have surged across tenors. 1.65%-1.7% on the 10Yr and 2.1% on the 30Yr are crucial levels to watch. A strong break above these levels will negate our view of seeing a broad sideways range. The price action in the coming days will need a close watch.
The German 2Yr (-0.62%), 5Yr (-0.42%), 10Yr (-0.12%) and 30Yr (0.24%) continues to move up in line with our expectation. Crucial resistances are at -0.1%/-0.05% on the 10Yr and 0.25%-0.30% on the 30Yr which are likely to halt the current rise and drag the yields lower again. A strong rise past these resistances is necessarily needed to become more bullish from here.
The Indian 10Yr (6.4603%) GoI continues to remain stable in the 6.44%-6.5% range. View remains the same. A breakout on either side of this range will decide whether the yield can go up to 6.54%-6.56% or fall to 6.4% in the near-term. From a bigger picture, 6.4% is a strong support while above which the medium-term outlook is bullish to see a break above 6.5% and see higher levels.
The 5Yr (5.7932%) GoI looks slightly weaker than the 10Yr GoI. It has to rise past 5.8% to regain strength. Else, a test of 5.74% on the downside in the near-term cannot be ruled out.
DATA TODAY
0:30 6:00 JP PMI
…Kshitij Expn 55.3 …Expected 54.3 …Previous 54.5 –
1:45 7:15 CN PMI
…Kshitij Expn 49.9 …Expected 50.1 …Previous 49.9 –
7:30 13:00 CH CPI
…Kshitij Expn -0.5 – 0.6 –
9:30 15:00 UK PMI
…Kshitij Expn 59.1 …Expected 57.6 …Previous 58.2 –
14:30 20:00 CA PMI
…Kshitij Expn 58.2 …Previous 57.2 –
15:00 20:30 US Manufacturing ISM
…Kshitij Expn 62.4 …Expected 60.4 …Previous 61.1 –
Data released yesterday:-
————————-
5:00 10:30 IN Manf PMI
…Kshitij Expn 56.9 …Previous-57.6 …Actual 55.5
8:30 14:00 CH PMI
…Kshitij Expn 64.3 …Expected 61.2 …Previous 62.5 …Actual 62.7
9:00 14:30 EU PMI
…Previous -58.4 …Actual 58
