STOCKS
Equities broadly remain positive. Supports on the Dow can limit the downside and keep the bullish view intact. DAX and Nikkei continue to remain strong. Shanghai seems to lose momentum and has to sustain above its key support to avoid a fall. Sensex and Nifty are holding well above their key support and can move further higher in the coming days.
Though the upmove in the Dow (27001.98, -22.82, -0.08%) seem to have paused, the broader picture continues to remain positive to see a rise to 27250-27300 and even 27500. A strong break above 27050 can accelerate the rally. Supports are at 26800 and a deeper once is at 26500.
DAX (12670.11, +40.32, +0.32%) has risen further in line with our expectation. Our bullish view is intact to test 13000-13200 in the short term. Intermediate resistance is at 12750. Supports are at 12500 and 12430.
As expected Nikkei (22501.89, +28.97, +0.13%) sustains higher. It can test 22700 and 23000 in the coming days as we have been mentioning for some time. Near-term support is at 22230.
Shanghai (2981.28, +2.57, +0.09%) seems to be losing momentum. It has to be seen if it can sustain above 2975 to keep the possibilities alive of seeing 3050 on the upside. A break below 2975 can drag it to 2950 and 2930 and will negate the chances of a rise above 3000 for now.
Nifty (11464, +35.70, +0.31%) sustains above 11400 and keeps the bullish view intact to test 11600 on the upside.
Sensex (38598.99, +92.90, +0.24%) on the other hand has risen well above 38500. While above 38500 the outlook is bullish and a rise to 39000-39250 is likely in the coming days.
COMMODITIES
The American Petroleum Institute reported a build of 10.5mln barrels in the US Crude inventories for week ending Oct 11, against expectations of 2.878mn build. The inventory figure from EIA is due today and is expected to show a build of 4mln barrels. Crude could trade lower over today and tomorrow on inventory build figures. Gold, silver and Copper also look bearish for the near term.
Brent (59.02) and WTI (52.92) look bearish while below 60 and 54 and could fall in the near term towards 58 and 51 respectively.
Gold (1492.50) and Silver (17.37) are trading low in line with our expectations and could fall towards 1480 and 17 respectively.
Copper (2.5880) has broken below 2.60 and is headed towards our mentioned support near 2.55 from where a short bounce looks likely. On the medium term charts, there is room for a fall towards 2.50 which could come into the picture if 2.55 breaks. For now we may expect a short bounce from 2.55.
FOREX
Dollar Index (97.99) fell sharply yesterday after US Retail sales data for September came out at a 0.3% decline on the M/M against expectation of a 0.3% rise. The figures decline for the first time since February. Dollar Index has immediate support near 97.75 which is likely to hold in the near term producing a bounce to 98.50.
Euro (1.1075) headed towards our expected 1.11-1.1125 levels which could hold in the near term pushing Euro down towards 1.1050 again. Over the next 2-sessions of this week, Euro may see a rise from current levels.
Dollar-Yen (108.77) has risen and look bullish towards 109.50-110 on the weekly charts before we see any rejection from there. Near to medium term looks bullish.
EUR-JPY (120.47) has broken above 120 and could find some rejection from 120.75-121.00 region as seen on the weekly candles. Only on a sustained break above these resistances, we may consider a fresh rise for the medium term. Watch resistance above current levels.
Aussie (0.6783) could see a fall towards 0.67 if it does not break above 0.68 just now. There could be some scope of seeing sideways trade between 0.68 and 0.67 in the near term.
Rising hopes of Brexit deal keep the Pound (1.2822) high. Breaking above immediate resistance near 1.28, the pound could now be headed towards 1.30.
The USDCNY (7.0984) continues to trade high but while below 7.12/10 there is still some scope of seeing a decline in USDCNY.
Dollar-Rupee (71.4450) came off sharply after testing 71.73 on the upside. While the pair trades below 71.50, there is scope of seeing a fall towards 71.30/25, which is now an important support region. A bounce thereafter from 71.30/25 looks probable in the near term.
INTEREST RATES
Increasing doubts and uncertainty over the US-China first phase deal has slowed down the pace of rise in the yields. The US Treasury yields are closer to their key resistances and will have to be seen if they can breach them or not. The German yields continue to look bullish and has room to rise further. The 10Yr (07.26 GS 2029) GOI has a crucial support near current levels which has to hold to avoid a fresh fall.
The US 2Yr (1.58%), 5Yr (1.56%), 10Yr (1.73%) and 30Yr (2.22%) have dipped slightly. The resistance at 1.75% on the 10Yr and 2.25% on the 30Yr mentioned yesterday are holding well. It will have to be seen if they can breach these hurdles and rise further to 1.85%-1.95% (10Yr) and 2.35%-2.37% (30Yr) going forward. A fall below 1.65% on the 10Yr and 2.15% on the 30Yr will negate the chances of the above mentioned rally.
The German 2Yr (-0.69%) remained stable while the 5Yr (-0.64%), 10Yr (-0.39%) and 30Yr (0.14%) have moved up and keeps our bullish view intact. As we have been mentioning over the last couple of days, the German 10Yr can move up to -0.33%. The 30Yr on the other hand can test 0.20% initially and then rise further towards 0.30% on a strong break above 0.20%.
The 10Yr (07.26 GS 2029) GOI (6.6638%) remained stable and in a narrow range above 6.65%. Crucial near-term support is in the 6.65% -6.64% region which has to hold in order to avoid a fall to 6.55%. While this support zone holds, a bounce to 6.70%-6.75% is possible again. We will have to wait and watch.
The Indian 10Yr (06.45 GS 2029) GoI dipped yesterday to close at 6.4661% as compared to 6.4937% on Tuesday.
