STOCKS
Sky seems to be the limit for Dow (22328.63, +0.71%) as all immediate resistances have been broken on the upside and the index has been sharply rallying to make fresh highs every other session. While the momentum remains intact, 23400-23500 is on the cards in the next few sessions.
Near term corrective dip seems to be at play for Dax (12991.28, +0.01%). Consolidation within 13100-12900 is likely to continue for a few more sessions. Near term likely to remain range-bound.
Nikkei (21658.25, +0.93%) is just coming off from levels below 21800 and if that holds, the price could come off towards 21400 or even lower in the coming sessions. Dollar Yen (113.77) also has resistance near 114.40/50 and while that holds, the pair could also come off towards 113.30 or lower in the near term.
Shanghai (3378.12, -0.02%) could head towards 3400-3410 in the near term. Overall sideways consolidation within 3350-3410 region is likely to continue in the near term.
Nifty (10146.55, -0.86%) saw a sharp decline to 10146 from levels near 10210 in the 1-hour Muhurat trading on Diwali. This could possibly indicate an upcoming correction this week towards 10050 or lower from where a bounce is again possible later on. A few sessions could be spent below 10250.
COMMODITIES
Gold (1275.88) is trading lower today breaking below 1275. There could be some chances of testing 1265-1260 levels in the coming sessions before again bouncing back towards 1280/90 levels.
Silver (16.97) could get some interim support near 16.85/80 levels and could possibly bounce back in the near term to levels near 17.10/20.
Brent (57.91) looks bullish in the near term while above 56.65 and has a fair possibility of testing 58.50/60 levels on the upside. For the next 2-3 sessions the crude price could be stuck in the 56.65-58.60 region with no major movement.
WTI (52.06) could re-test 52.50 before coming off towards 51.20-51.00 levels in the near term.
The Brent-WTI spread (5.83) has risen sharply over the last few weeks and could possibly pause near 6.50-7.00 from where either the spread may start falling towards 5 or remain range-bound within 5-7 region.
Copper (3.1675) has been trading with narrow movements after the recent correction from levels near 3.25. Immediate support on the downside is visible near 3.10 and while that holds, there could be some range-bound movement within 3.12-3.20 before the price again starts to move up.
FOREX
Week of the ECB (on 26th, Thursday). The Euro (1.1768) hovers just above crucial Support in the 1.1730-00 region. Will the potential Bear SHS prove true? If so, we would start looking for 1.15 instead of 1.22.
If the Support at -1.95% on the German-US 10Yr yield spread (currently -1.93%) breaks, it could pull Euro below 1.1730-00. Need to watch this.
Dollar-Yen (113.75) has moved up sharply, well past 113.00. Long-term Resistance seen near 114.50 now. The fresh rise in the Euro-Yen (133.87) after last week’s bearish scare reduces the bearishness on the Euro.
The Pound (1.3194) has immediate Resistance at current levels and medium term Support at 1.30.
Dollar-Rupee (65.03) may find Resistance in the 65.15-35 region in the early part of the week.
INTEREST RATES
In the last ECB meeting (7th Sept), Draghi said they will be deciding about the future course of QE and will let the market know about it in the meeting on 26th Oct, this Thursday.
There may be room for German Yields to move up by 7bp to 20bp across the Curve in the coming weeks.
The US Yield Curve has steepened a bit with the 10Yr (2.38%) and 30Yr (2.89%) moving up a bit more than the 2Yr (1.58%) and 5yr (2.02%) last week. Note that the Curve had seen dramatic flattening earlier. The 10-5 (0.36%) and the 30-10 (0.51%) and 30-5 (0.87%) have bounced from Supports cited last week.
