Morning briefing: Equities are mixed amidst the looming concerns of a US government shutdown

Vikram Murarka Kshitij Consultancy Services

The Dollar Index is likely to decline further within its 99-97/96 range. The Euro & EURINR can head towards 1.18/19 and 105 or higher in the near term. EURJPY can either test 173 or 172 before rebounding later. USDJPY has immediate support coming around 147.00-146.50 which can be tested if the fall extends further. USDCNY can trade within 7.14-7.10 region for some time. Aussie has risen past 0.66 and if sustained, can test 0.670-0.675 before getting peaked out. While Pound needs to breach 1.35 to open the doors for higher levels in the near term. USDINR can head towards 89.00 before halting. RBI MPC meeting, US ADP Employment & US Manufacturing ISM & IN Manufacturing PMI data releases are scheduled today.

The US Treasury yields have risen back well after testing their support. That keeps alive the chances of the rise that we have been expecting. The German yields remain lower and stable. They have to get a strong bounce from here in order to avoid more fall. Wait and watch. The 10Yr GoI continues to more up. There is room to move further higher. The RBI monetary policy meeting outcome today will need a close watch.

Equities are mixed amidst the looming concerns of a US government shutdown. The Dow and Dax have immediate resistances near 46500 and 24000 which if held can produce a decline back towards 45500 and 23500-23000 respectively. The Nifty has dipped lower and needs to hold above 24600 to prevent further decline. To 24400/200. Watch the RBI monetary policy meeting today where the market expects rates to be kept unchanged. The Nikkei continues to fall as expected and could test 44000-43000 soon. Shanghai is trading in the green today and could trade within 3800-3900 for the near term. A break above 3900, if seen can be bullish towards 4000.

Brent and WTI have both tested their immediate supports at $66 and $62 respectively, and while these levels hold, they are likely to trade within $66-71 and $62-66 ranges for some time, though a break below could extend losses further. Gold has hit a fresh all-time high at $3,899.20 and looks set to rise towards $3,950-4,000, while Silver, despite a slight dip, remains bullish towards $47.50-48.00. Copper has declined to $4.82 and could slip a bit more towards $4.80-4.75 before bouncing past $4.90, whereas Natural Gas continues to edge higher with room to test $3.35-3.40 in the near term.

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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.

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