Market Morning Briefing

GOOD MORNING!

STOCKS
Western hemisphere Equity indices surprised us by rising yesterday. 

The Dow (18043.93, +1.17%, +208.63) found Support at 17800 itself, much above our mentioned Support at 17600. Whether it manages to rise past 18200 in the coming days or not will decide the bull/ bear trend over the coming weeks. Crucial Support on the downside is 17800-600.

The Dax (11891.91, +1.74%, +204.21) too bounced back a bit, not seeing follow-through selling from Friday's sell-off. Although the Dax is benefiting from a weak Euro (1.0727) and people are upgrading their growth estimates for Germany, the Dax can target 11400 while below 12400. 

Caution advised on the Shanghai (4207, -0.22%) after the 104% rise since Aug-2014 and the 42% rise since Feb-2015. As mentioned yesterday, a break below 4150-00, if seen, would signal a break of the current uptrend.

The Nikkei (19812, +0.9%) is up a decent bit, having found Support at 19400 yesterday. The uptrend since Oct-2014 remain intact. A rise past 20000, if seen, could bring in more buyers.

Bad scare in the Nifty (8448.10, -1.18%, -157.90) yesterday and over the last few days. Good Support seen at 8400-8350. We see chances of it holding and producing a lasting bounce. Let's see. 

COMMODITIES
In the big picture, Copper (2.7340) and WTI Crude (56.35) are by and large higher than levels in January (2.42 for Copper) and March (42 for WTI), while Gold (1196) is trading well below the Jan-2015 high near 1310. This could be suggestive of some revival hopes for global growth, although economic data is not bearing this out as yet.

The rise in Crude is the biggest development over the last few weeks. There is a big Double Top in theGold/ WTI Crude ratio (21) which suggests further gains in the WTI towards 62. 

Please see http://www.kshitij.com/graphgallery/coppercandle.shtml#candle

On the other hand, the Brent (63.42) has Resistance near current levels and Brent-Nymex Spread (7.07) is coming off from just below 8.

Copper (2.7340) has Resistances near current levels while Gold (1196) has Resistance near 1210. Both can see strong gains if the Resistances are broken, but can see a bit of profit-taking/ consolidation while the Resistances hold.

FOREX
Drop in the EURUSD (1.07260), Crashing of Nifty (8448.10) and selling of Dollar by exporters all led to a sharp rise in the USDINR yesterday to as much as 40 paise from 62.53 to 62.92.

Dollar-Rupee is expected to hold below crucial resistance near 63.00 else if a sharp movement towards 63.10 is seen it may initiate a fresh move which seems less likely for now. There is also a possibility of the currency pair to re-enter the 62.60-62.50 region in the coming sessions if 63.00 holds strong. 

Euro (1.0726) came off sharply from channel resistances mentioned yesterday, see chart:http://www.kshitij.com/graphgallery/eurcandle.shtml#candle and may move towards immediate supports near 1.0715-1.0695. 

Dollar Index (98.04) bounced back from 97.00 (above our expected levels of 96.52-96.38)and is heading towards 98.77 again. Broadly sideways consolidation is seen and may continue for some more time. 
USDJPY (119.39) bounced from 118.5, (above our expected 118.30) and may move towards 120. Broad sideways movement continues in the 121-118 region. 

Pound (1.488) came off exactly from resistance near 1.505 as mentioned yesterday and may target support near 1.4796 in the near term. (Lower support at 1.423 mentioned yesterday is negated for now as we have other interim supports that may hold)

Aussie (0.7691) spiked a bit above the down channel (see chart:http://www.kshitij.com/graphgallery/audcandle.shtml#candle ) but re-entered into the channel yesterday from an intra-day high of 0.7826. This move has been in line with our expectation. 

INTEREST RATES
The US yield differentials have paused a bit after showing initials signs of reversal from the long term don trend; see charts: http://www.kshitij.com/graphgallery/usddiff.shtml#sindiff . It is possible that the differentials may move sideways for sometime before resuming the downfall as they have immediate resistances above current levels which are likely to hold. The yields are almost stable today and may try to rise a bit in the near term. 

The German yields are up today. The 10Yr (0.075%) , 5YR (-0.147%) and 30 YR (0.435%) are up from 0.071%, -0.15% and 0.429% respectively. The Japanese yields on the other hand have come down sharply. The 30Yr (1.22%) is back to test support levels and if that holds may bounce back again. It is finding difficulty in moving above 1.3% just now and may remain in the 1.3-1.2% zone in the near term. UK Gilts are trading lower; see charts: http://www.kshitij.com/graphgallery/gbpsin00.shtml#sin00 

DATA TODAY

No major data release today.


DATA YESTERDAY:-
No major data release yesterday.