STOCKS
IMF cut global GDP growth forecasts yesterday, especially for Europe and Germany and Italy within that. Chinese Q4 2018 GDP growth came in at a multi-year low 6.40% yesterday. Earlier, the Chinese manufacturing PMI (49.7) had dipped below 50 on 2nd Jan. Although most Indices have some more room on the upside in the near-term, maybe growth concerns will trigger profit-taking in the medium term.
The USA was closed yesterday for Marin Luther King day. The DAX (11136.20) was quiet yesterday, after having moved up well on Friday. Good Resistance seen at 11300.
Some initial profit-taking was seen on the Nikkei (20709) yesterday. Still, we look for some more upside towards 21300, which would be a better place to take profit.
The Shanghai (2598) rose yesterday, creeping up towards crucial Resistance in the 2627-2650-60 region, but is seeing a bit of profit-taking today. There can be chances of a pullback towards 2530 from anywhere between current levels and 2660.
The way the Sensex (36578.96, +0.53%) and Nifty (10961.85, +54.90, +0.50%) are trading, both can continue to creep up towards 36800 and 11080 respectively over the next few days. Long-term Supports seen at 36000-35750 and 10700 respectively.
A good Double Bottom on the Kospi (2115.10). There may be room up to 2165-80 in the coming weeks.
COMMODITIES
Commodities have all fallen and are trading lower. Gold and silver could bounce from immediate support while Crude prices could be stable. Copper looks bearish.
Brent (62.21) and WTI (53.68) seem to be holding below immediate horizontal resistances at 64 and 56 respectively. Brent 3-day and weekly line charts indicate a possible fall from levels near 64-65 on Brent. We could expect some ranged movement below 65 (Brent) before a fall is seen. WTI could be pulled lower too while 56 holds.
Brent-WTI spread (8.53) has come down from 8.71 as expected. A further decline towards 7.55-7.15 is on the cards, indicating a possible fall in the Crude prices too.
Gold (1277.50) and Silver (15.24) have fallen sharply. The resistance near 1300 has held well on the Gold 3-day line chart and while the current dip continues, we could possibly see a fall towards 1260 in the medium term before the price bounces back towards 1280 again. But watch a possible bounce from 1270/75 over the next 1-2 sessions.
Silver is just above immediate daily trend support and while that holds, a bounce back towards 15.75 is on the cards.
Copper (2.6740) was unable to bounce above our mentioned resistance near 2.75/77 and a sharp rejection lead t o a fall in the Copper prices. We could see some more fall in the near term towards 2.65.
FOREX
Currency pairs are mixed. While Euro and Pound looks strong, Yen, Yuan, Rupee and Aussie are likely to weaken against the US Dollar over the next 1-3 sessions.
Dollar Index (96.34) and Euro (1.1367) are almost stable with no major movements from levels seen yesterday. While support near 1.1350 holds on Euro, the currency looks bullish in the near term. These indicates a fall in Dollar Index towards 96.00 or lower again.
The Euro-Yen (124.54) is trapped below 125.20 for the last 2-weeks and is unable to move sharply on either side. A break above 125.20 would open up scope of further rise towards 128 but failure to bounce above 125.20 could indicate a fall towards 123.50-123.00 in the coming 1-2 weeks.
Dollar Yen (109.50) is rising as expected and could target 110.55-111.00 levels in the near term.
Pound (1.2893) has immediate support at 1.28 and while that holds a rise to 1.30 is possible just now before coming off in the medium term.
Aussie (0.7149) could fall targeting 0.71-0.70 levels while trades below 0.7250. Immediate view is bearish.
USD-CNY (6.7965) has been in an near term uptrend. View is bullish towards 6.83 from where a small corrective dip is possible within the current upmove.
Dollar Rupee (71.2850) could remain in the 71.60-71.10 region. Note that both levels are crucial and a break on either side would decide further direction for the near term. Break above 71.60 could take it higher to 71.85 and a fall below 71.10 could turn bearish. Need to watch if 71.10 holds for the day.
INTEREST RATES
Although the USA was closed yesterday, US Yields are showing a small dip compared to the upmove seen on Friday. The 2Yr (2.59%, down from 2.61%) remains slighly below the 5Yr (2.60%, down from 2.62%). The 10Yr (2.77%, down from 2.78%) and 30Yr (3.09%, up from 3.10%) have also dipped slightly. Let us see if the cut in growth forecasts by the IMF leads to more dip in the Yields.
The 10Yr GOI (7.5694%) rose to 7.6496% yesterday, just shy of the crucial Resistance at 7.770%, but then closed well below 7.59% again. If the Yield stays low today as well, then we might consider the chances of a top being in place. Let us see how it goes.
