STOCKS
Dow (23539.19, +0.10%) closed the previous session at slightly higher levels. Upside is open for a test of 23800. Near term looks bullish.
Dax (13478.86, +0.28%) is almost quiet at current levels and has been stable since Friday. The index could try to attempt a rise towards 13600-13700 in the near term. Although there little scope for upside just now, a rejection is around the corner, may be by the later half of this month.
Nikkei (22540.17, +0.00%) is trading near our target levels of 22666. We need to see if this holds for the medium term or the index manages to rise past 22666 in the medium term to head towards 23000 and higher.
Shanghai (3360.15, -0.34%) has fallen sharply to test support near 3360. A bounce back from current levels would take it towards 3400 and higher again; else if the falling momentum continues, we could see a test of 3340 or lower in the coming sessions.
Nifty (10452.50, +0.28%) is likely to dip towards 10400 over today and tomorrow. It would be important to see if the index comes off below 10400 or manages to rise past the high made last week. A pause and some corrective dip is preferred for some time.
COMMODITIES
Gold (1269.00) is trading above support near 1260 and while that holds, we could see some consolidation in the 1260-1290 region. Unless there is some directional clarity on the US Dollar Index, Gold is likely to remain range bound for the medium term. A break below 1260 could open up lower target of 1240.
Brent (62.25) has surprised by moving above 62 on the first attempt and while 62 holds, Brent could well test 63-65 levels in the coming sessions. Near to medium term looks bullish. WTI (55.75) has also risen sharply on Friday and is trading higher today. While the price has resistance on the 3-day candles, it is likely to break on the upside moving higher towards 57-58 levels soon. Near term view is bullish.
Copper (3.1335) is overall bullish for the medium to long term. 3.05 is the immediate support and while that holds, the price may move up towards 3.25-3.30 levels.
FOREX
There was a false spike to 1.1690 on the Euro (1.1614) after the US NFP release on Friday, but the currency fell again later on. This increases its bearishness, suggesting some more dip towards 1.1550-30 this week. Note that Dollar Index (94.895) has seen a high of 95.10 so far, in line with our target of 95.50.
Dollar-Yen (114.36) rose past the 114.50 Resistance to 114.73 today, but has come off a bit from there. As we said on Friday, "A break of Resistance, if seen, could propel the market much higher, but we would not like to pre-empt such a move." Even so, a fresh rise past 114.50-75 can test 114.90-115.00. That said, we are ambivalent about a rise past those levels.
Contrary to expectation of a dip towards 130, the Euro-Yen (132.82) now appears ranged near current levels as both the Euro and Yen seem to be gaining/ losing to the same degree against the Dollar.
No movement in the Pound (1.3075) which trades exactly where it was on Friday. So we repeat, "This is in line with our suggested view of range trade between 1.31-33. However, be careful now as a further decline from here could herald 1.2750 in the medium/ long term. Watch today."
Overall Dollar strength has prevented the Aussie (0.7651) from rising past 0.7715-30. Maybe we have to consider chances of a slow, grinding dip towards 0.7530 while below the important Resistance at 0.7750. Interim Support seen at 0.7600 as well.
Dollar-Yuan (USDCNY = 6.6365) has moved up again after dipping to 6.5829 last week. Dollar-Rupee (64.55) may also rise towards 64.70 this week.
INTEREST RATES
Yields have softened across the globe as the US NFP came in a little softer than expected on Friday. The US 10Yr (2.34%) is down from 2.35%, German 10Yr (0.36%) is down from 0.38% and Japan 10Yr (0.04%) down sharply from 0.05%.
However, as stated on Friday, there should be Support near 2.25% on the US 10Yr. We would keep an eye on Brent Crude (62.19) which could possibly rise towards 63-65. A rise in Brent has potential to pull US yields higher.
Indian GOI (6.8576%) has come off a bit from the high of 6.8930% seen last week. This could help in weakening the Rupee a bit.
