STOCKS
Global stock indices are all strong and the bulls do not seem to leave the ground just now except Shanghai and Nikkei. Nikkei could be vulnerable to a fall in the coming sessions while Shanghai remains range-bound.
Dow (23348.74, -0.36%) has been stable near current levels for the last 3-4 sessions. 23250-23500 region holds for now with a possible break on the upside towards 23750 in the medium term.
Dax (13229.57, +0.09%) was almost stable yesterday and there is scope of a rise towards 13300-13500 in the coming sessions. Near to medium term looks bullish.
21700 is the immediate support on the Nikkei (21991.16, -0.08%) but the index is likely to come below 21700-21600 levels in the medium term. The fall in Dollar Yen has from 114.50 levels could be indicative of a fall in Nikkei going forward. In that case a test of 22666 on the upside for Nikkei is doubtful.
Shanghai (3380.51, -0.29%) is trading well within the 3360-3425 region and this range could hold for some sessions in the near term. A re-test of 3350 looks likely.
Nifty (10363.65, +0.39%) is trying to reach towards 10400, attempting a break above current resistance for the last 3-sessions. A break above 10400, if seen could open up chances of 10500-10600 in the near term; else a sharp correction from 10400 could be expected towards 10250.
COMMODITIES
Gold (1275.74) has immediate support zone of 1260-1240 which is likely to hold in the near term. Some stable movement with a possible downside extension is possible in early November followed by a bounce back towards 1300 levels. A break below 1240, if seen could turn very bearish for the coming weeks.
Silver (16.81) is almost stable and could trade within 16.50-17.00 region for the next few sessions.
Brent (60.83) has almost moved up to our initial target of 61 and it would be crucial to see if the price comes off from there or breaks higher to make fresh highs in the current rally, heading towards 63. A rejection is expected either from 61 just now or from higher levels near 63. Near term looks bullish.
WTI (54.07) is also quiet and could possibly attempt a rise towards 55-56 levels in the near to medium term before coming off from there.
Copper (3.1035) could come off to test immediate support near 3.05 which is likely to hold in the first testing, producing a bounce to 3.15/20 again.
FOREX
Keep on eye on possible big movement in Dollar-Yen.
As warned, Dollar-Yen (113.08) has come down to a low of 112.97, dragging the Euro-Yen (131.59) lower with it even as the Euro (1.1636) recovered a bit.
The dip in Dollar-Yen possibly confirms the strength of the 114.50-115.00 Resistance and opens up chances of further fall towards 112. A Day Close below 113.00 is needed to confirm. The Euro-Yen too looks like it can dip further to 130 at least.
This suggests the Euro will be subdued around 1.16. We have a Bear SHS target near 1.15.
As expected, the Pound (1.3203) is trading sideways between 1.3040-3300 and can move to the upper end of the range. The Aussie (0.7675) rose to almost 0.7700 yesterday. It has Support at 0.7630-20 and might try to move up further while that holds.
Dollar-Yuan (6.6317) has dipped a bit from yesterday’s 6.6438. Dollar-Rupee (64.8550) has dipped to 64.80 yesterday. Need to see if it continues to hold above 64.70 today or not.
INTEREST RATES
There’s been a sharp dip in US yields (5Yr 1.99%, 10Yr 2.36% and 30Yr 2.87%) compared to 2.04%, 2.43% and 2.94% respectively. This is a bit of a surprise ahead of tomorrow’s FOMC meeting even as the US PCE moved up to +1.14% (y/y) yesterday.
As expected, however, the US yield curve has flattened again a bit, with the 30-5 (0.88%) coming down from 0.91%.
The US-Japan 10Yr Spread (2.30%) has seen dip from levels near 2.38% last week. A break below 2.30%, if seen, could be bearish for Dollar-Yen. This is to be kept an eye on.
