Morning breifing: The German yields remain lower and stable
The Dollar Index is trading below 99 and the targets of 98-96 are kept open for now. The Euro above 1.14 can ascend towards 1.15/16. Similarly, EURINR if sustains above current levels, can extend the ongoing rise to 99-100 levels. EURJPY continues to trade within the 165-160 region. USDJPY has declined as anticipated and can fall back towards 142 or even 140 before halting. AUDUSD and Pound are trading higher within the 0.6400/635-0.6550 and 1.34-1.36 range respectively. The USDCNY on a decisive break below 7.18 can test the lower targets of 7.17/15. The USDINR yesterday tested 86.0225 before closing lower. Need to see whether it breaks past 86.10 or continues to hold the immediate range of 86-85. Watch price action closely around current levels. The ECB meeting and US Trade Balance are scheduled today.
The US Treasury Yields have declined sharply after a data release yesterday showed a slowdown in job creation in the private sector. The yields have dipped below their supports. While this sustains, more fall can be seen going forward. The German yields remain lower and stable. There is room to dip further to test the support. The 10Yr GOI remains stable within its current range. The RBI meeting outcome is due tomorrow.
The Dow declined yesterday after a weaker-than-expected ADP private payroll data. A rise to 43,000 and higher cannot be negated in the medium term, while above 41,000. However, the markets would await the NFP data release due on Friday. The Dax rose as the EU trade chief said that the talks with the US were advancing in the right direction. Near-term resistance is seen at 24500, which needs to be broken on the upside for further bullishness to emerge. Nifty needs to break above 24800 to gain bullishness towards 2500,0 while Nikkei and Shanghai could trade within the 37000-38500 and 3340-3400 range for the next couple of weeks at least.
Crude prices are declining as expected, pressured by news of potential Saudi output hikes, targeting $62–$60 (Brent), and $60–$58 (WTI). Gold has risen above $3,400 and is likely to head toward $3,450–$3,500, while Silver remains bullish despite a minor dip, targeting $35.50–$36. Copper continues its uptrend above $4.90 with potential to reach $5.00–$5.10. Natural gas saw a slight dip but retains a positive outlook towards $3.90–$4.10.
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Author
Vikram Murarka
Kshitij Consultancy Services
Vikram has been forecasting, trading and hedging currencies since 1991. Beginning his career as a currency trader in Essar Group, he was managing an FX exposure of $1.2 bln.
