STOCKS
All indices are mixed. Dow and Nikkei has some scope of rising in the coming sessions while Dax, Nifty and Shanghai looks bearish.
Dow (25322.31, +0.023%) and Dax (12842.91, +0.60%) have both moved up slightly. Dow has room on the upside and could rise further in the coming sessions towards 25750 while Dax has immediate resistance at 12900 and need to break on the upside to move towards 13100. Overall upside for Dax could be capped at 13100 from where a medium term corrective dip is possible.
Nikkei (22867.41, +0.28%) and Shanghai (3054.48, +0.055%) are also up today. Nikkei broke above the daily trend resistance and if the rise sustains, the index could test 23500 in the next few sessions. Else a fall back to 22000 is possible. Shanghai is trading just and is likely to break below 3050 in the near term. That would open up chances of further downside towards 2950.
Nifty (10786.95, +0.18%) tested exactly the daily trend resistance at 10850 yesterday but could not sustain to close the session above 10800. While this resistance holds, the index could come off towards 10650 in the coming sessions. A break above 10850, if seen would turn bullish for the medium term.
COMMODITIES
Overall some bullish hope prevails for the metals and crude in the near term.
Copper (3.2524) is almost stable near current levels. A fall towards 3.22-3.20 is possible before another sharp rise is seen.
Brent (76.46) and WTI (66.19) show some directional differences just now. Brent has some support at 75 which if holds, could take the price to higher levels of 79-80 in the coming sessions. WTI on the other hand is trading along the earlier support turned resistance and could come off towards 65-64 if it does not manage to break the resistance immediately.
No major movement in Gold (1298.31) for now. The broad 1310-1290 region is holding well and some more of sideways range-trade is possible in the near term.
Gold-WTI ratio (19.67) has faced some rejection near resistance at 20 and while that holds, the ratio could come off towards 19.
FOREX
Dollar index (93.73) rose from levels near 93.4 yesterday and has seen a high near 93.89 today. It could now move lower from here, targeting levels near 93.0-92.8 in this week.
Euro (1.1766): Contrary to our expectation, Euro has seen lows near 1.174 since yesterday, but now looks like it could rise from the 21 days MA near 1.173 towards 1.1875-1.1900 in this week. Levels near 1.19 could be a crucial resistance zone.
Dollar Yen (110.24): Against our expectation, Dollar Yen has turned bullish (seeing a high near 110.5). It could rise further this week to target crucial resistance near 111.5.
Euro Yen (129.70): Euro Yen is continuing to stay near 129.5-130.0 as we had expected. The possibility of Euro moving past 1.18 and Dollar Yen touching 111 implies that Euro Yen could test higher resistance on daily candles near 131 in this week.
Pound (1.3364): As expected, Pound is moving lower towards 1.33 after having tested resistance on daily candles (near 1.347) last week. It looks bearish in this week towards levels near 1.33-1.32. On the downside, 1.31 is a crucial level, whose break could lead to medium term bearishness.
Dollar Rupee (67.4225) : Dollar Rupee is likely to trade within 67.30-67.50 with some chances of testing 67.10.
INTEREST RATES
Current yields: US 10 Year (2.94%), 30 Year (3.09%), 5 Year (2.79%), 2 Year (2.52%)
US yields have been seeing minimal movement over the past 7-8 sessions as the global bond markets gear up for an important 4 days ahead.
A host of key data releases and major events are lined up, which could have a significant impact on global yields :
- Trade tensions have already been aggravated due to the controversial G7 meet.
- The US-North Korea summit in Singapore is underway currently (however, we are skeptical if this event could have any impact on yields).
- US CPI data due later today: Consensus forecasts see only a moderate increase by 0.2% m-o-m in both headline and core CPI. If the actual data overshoots / undershoots this level, it will impact yields.
- FOMC meet tomorrow: A 25 bps rate hike seems already factored in by the markets. A higher rate hike will be extremely hawkish and should take the 10 year yield beyond 3%.
- US Retail Sales data release on 14th June
- ECB meeting on 14th June as well : expected to be hawkish, thereby taking global yields higher
