Market Morning Briefing

GOOD MORNING!

EQUITIES
Globally, all the equity markets are in a pause mode, mostly consolidating in narrow ranges. It may snap out of it soon to make a decisive move.

Dow (16179.66, -0.17%) has spent the last session consolidating in a narrow range and may well rise further towards 16400. The Nikkei(15027.86, -0.16%) has also seen a very good rise, but could face some Channel Resistance in the 15100-200 region. The Shanghai (2027.31, -0.34%) is trying to find support at 2020-15 after breaking below 2050 contrary to our expectation. The strong bearish momentum may take it to 1985 now if 2015 is not protected.

The Dax (9699.35, -0.10%) has risen to test important interim Resistance. A rise past 9700-9800, if seen, could take the market up towards 10000.

The Nifty (6200.05, +0.23%) has gained little though keeping the uptrend intact. It has entered the gap zone of 6190-6265 and the price action at the levels of 6230-40 and then 6265 must be assessed before taking any firm stance in the medium term. Weakness may set in below the support of 6150-30.

COMMODITIES
Gold (1339.53) continues its rally targeting 1350-1400 in the coming weeks while Silver (21.88) is also headed upwards towards 22.5-23 but with a lower momentum which is indicated by the Gold-Silver ratio (61.266). The ratio is rising targeting 62 in the coming weeks.

Copper (3.2580) has risen a bit but overall remains ranged near 3.25 levels. No major movement is expected for now.

Brent (109.52) has come off from resistance near 110.8 and while that holds we may see some ranged moves. Even if it falls to support levels near 108, it may bounce back again targeting 111-112.5 in the long term. Need to watch crucial 108 levels for further direction.

Nymex WTI (101.87) is trading lower after a fall yesterday but remains ranged. A fall below 101 would push down prices sharply towards 99 and even to 98.5-98.0. Need to check if support near 101 holds and helps to bounce towards 104 in the long term. Gold-WTI ratio (13.1422) is rising and may target 13.5-14 in the coming weeks which may signal a fall or ranged movement in WTI while Gold may continue to rise further.

CURRENCIES
Just like the equity markets, the major currency pairs are showing very mute action too with virtually no change.

Dollar Index (80.17) has not managed to break above 80.40-45 which keeps it weak in the short term and may push it towards 80-79.90 once again. Strength will be confirmed only above 80.45.

The Euro (1.3742) is stuck in a range of 1.3685-1.775 with mixed clues and may remain inside for some more time before breaking out and determining the next direction. Remaining above 1.37, the possibility of a sharp rally to 1.3850 remains but a break below 1.3685-75 would bring the weakness back.

Dollar-Yen (102.35) is consolidating in the range of 101.75-102.75. Holding 101.80-70, it may try to rally to 103.50-104 in the short term while the intermediate downtrend remains. The bearish momentum will return on a break below 101.80-101.40.

The Euro-Yen Cross (140.70), like most other currencies, is rangebound between 140 and 141. It must break above 141-141.25 to reach our target of 142 and even 142.70-143 is possible in that case. Weakness may return on a break below 139-138.80.

Pound (1.6676) is in a small correction of its major uptrend now which may extend to 1.6540-1.65 only if breaks the support of 1.66. It may reach 1.69-1.7050 after the current correction finishes. All the dips till 1.6470-80 may be bought into.

Aussie (0.8992) remains in a broad range of 0.89-0.91 and only a breakout from this range may give a trending move with a clear direction.

Dollar-Rupee (61.94) had an extremely narrow range day. It must hold above the support zone of 61.80-70 to keep the possibility of a rally to 62.40 alive. This is the second consecutive day where the opening and closing price are very close which implies a lot of hesitation and indecision on the downside.

INTEREST RATES
Yields are down globally.

The US 10Yr (2.71%) has started to come off from the resistance zone of 2.73%-2.75%. The 10-5Yr yield differential (1.19%) has started to fall. We may now see the 10Yr consolidating in a sideways range and target support near 2.50%.

The German 10Yr (1.64%) is down trading in the support zone of 1.63%-1.64%. Moving sideways in the range of 1.65%-1.70% since the beginning of the month, it can now bounce to test the resistance near 2.00%. The German-US 2Yr spread (-0.21%) is up slightly. The 10Yr spread (-1.03%) is also up but it can still target support near -1.12%.

The Japan 10Yr (0.57%) is on its way to our target of the support near 0.53%-0.55% from where we may see a bounce to 0.60%. The US-Japan 10Yr spread (2.12%) is also up but it can still target the support near 2.05% before rising to 2.20%.

The Indian 10Yr GOI yields (8.87%) is down and ranged between 8.75%-9.00%. Above 8.85% we can expect it to rise beyond 9.00%.

DATA TODAY

9:30 GMT or 15:00 IST UK GDP
...Expected 0.70 % ...Previous 0.68 %

15:00 GMT or 20:30 IST US New Home Sales
...Expected 406 K ...Previous 414 K

DATA YESTERDAY

US Case Schiller
...Expected 13.30 % ...Previous 13.7 % ...Actual 13.40%

US Cons Conf
...Expected 80.20 ...Previous 79.40 ...Actual 78.1