STOCKS
The Resistance near 24000 on the Dow (23909.84, -0.36%), near 11000-11050 on the DAX (10855.91, -0.29%) and 2550 on the Shanghai (2543.11, +7.34, +0.29%) have all held yesterday, in line with expectation.
As mentioned yesterday, we might expect to see near-term dips towards 23500 and 10800-700 in the Dow and DAX respectively before they move up afresh later. A fall below 23500 and 10700, if seen, may trigger a deeper decline.
The Shanghai (2543.11, +7.34, +0.29%) might have scope to dip to 2500 over the next few days. Our preference is that it slowly starts moving up again from 2500.
Japan was closed yesterday. The Nikkei (20538.39, +0.88%) has been consolidative over the last few days. It is long-term bullish while above trendline Support at 19500 on the Weekly Line chart and dips are likely to be bought.
The Sensex (35,853.56, -156.28, -0.43%) and Nifty (10737.60, -57.35, -0.53%) have tested Supports at 35691 and 10730 respectively. Some more dip towards 35500 and 10650-600 respectively is possible in the near term. Such a dip, if seen, might present a buying opportunity for the long-term.
COMMODITIES
Commodities are trading at slightly higher levels today. Gold and Silver are stable and likely to continue their sideways movement.
China data reports a decline in the import-export concerning demand for oil. News states 3-cargoes of US Crude heading to China from the US Gulf Coast, first since late September after the 90-day pause started between the two countries.
Brent (59.71) and Nymex WTI (51.16) are slightly up after initial decline seen overnight. Crude prices look bearish in the near term or could remain ranged below 64 and 54 for the near term before declining further.
Brent-WTI Spread (8.52) could decline further towards 7.55 or even lower in the near term indicating a dip in the crude prices too.
Gold (1292.60) and Silver (15.71) continue to trade below important resistances of 1300 and 16 respectively and the prices are in a pause mode just now unable to decide which direction to move on. The bulls seem to be holding the prices at current levels not allowing the bears to take over just now. Near term could see a dip to 1280/70 and 15.25 on Gold and Silver respectively.
Copper (2.6455) has weekly long term support near 2.60 on the line chart but is unable to bounce above 2.70 just now. While below 2.70, we could expect some more of range trade in the 2.70-2.60 region. A break above 2.70 is needed to turn bullish for copper in the medium term.
FOREX
Dollar Index (95.52) has not been able to break above 95.78 and is coming off from there again towards 95.00. While below 95.75, the index looks bearish towards 95.00-94.50 in the near term. Although there is room on the upside, the index may possibly test 94.50 initially before bouncing back towards 96 or higher.
Euro (1.1483) is again heading towards 1.15. Resistance is now visible near 1.16/17 and while that holds, we may expect some ranged sideways movement within 1.14-1.16.
The Euro-Yen (124.54) is stuck below 125.20 and while that holds, narrow sideways movement could continue. A rise in Euro towards 1.16 could take Euro-Yen towards 125.20 or even higher in the near term. On the weekly line charts, medium term looks bullish.
Dollar Yen (108.45) is trading sideways and is in a consolidation mode. The long term support on the weekly line charts suggests bullishness in the medium to long term. The current sideways movement could be a pause period before a sharp upmove.
Pound (1.2893) is looking bullish for the near term targeting 1.30/31 soon. Decent near term resistance is visible on the 3-day line chart near 1.31.
Aussie (0.7211) is nearing to resistance at 0.73 from where a corrective dip is possible. Near term view is bullish but rejection from 0.73 could bring it back to 0.71.
USD-CNY (6.7521) is almost stable today. While 6.74 holds, we could see some stable and ranged movement in the 6.74-6.78 region.
Dollar Rupee (70.94) has scope of testing important resistance zone of 71.00/15 on the upside while the downside could be limited to 70.60. On the NDF, USDINR is trading at 70.74 indicating a possible dip today. But there is scope of testing upper band of 71.00/15 before sharply coming off from there.
INTEREST RATES
As it turns out, the Indian 10Yr GOI (7.4309%) saw a decent dip yesterday. With the December CPI (2.19%) coming in even lower than the reading of 2.33% for Nov, the market will price in greater chances of a rate cut by the RBI. Maybe this will pull the 10Yr GOI to dip below 7.40%. Let us see how that goes.
The German 10Yr (0.22%) is trading millimetrically lower while the German 2yr (-0.589%) seems to be moving up slowly. So, the Curve as a whole is getting a little flatter.
We remain unsure of the direction of US Yields (2Yr 2.53%, 5Yr 2.53%, 10Yr 2.70% and 30Yr 3.05%) in the near term and would like to wait and watch for a few days.
