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Morning briefing: The US Treasury and the German yields remain stable

Most currencies seem to have gone into a sideways consolidation within specific ranges which may continue for the rest of the week. Dollar Index and Euro can trade within 99.50-98.50 and 1.1670-1.1580 respectively while EURINR could rise to 111.50 while above 110.35. EURJPY and USDJPY could trade within 185.50-185 and 159.50-160.50 respectively while USDCNY could see a slight rise to 6.77/78 before again falling back towards 6.75. Aussie and Pound can trade within 0.72-0.71 and 1.3450-1.35 while USDINR can rise towards 95.50 while above 95.25.

The US Treasury and the German Yields remain stable. The Treasury yields are hanging around their support. They have to bounce back immediately to avoid the extended fall. We will have to wait and see. The German Yields on the other hand can dip to test their support first and then rise back again. The 10Yr GoI is struggling to get a strong follow-through rise. A rise above the immediate resistance is needed to go higher and avoid more fall.

Dow and DAX remain positive after rebounding from recent lows and can rise further towards 51500-52000 and 25500-26000 respectively. Nifty has recovered above 23,300 contrary to expectations, keeping the near-term bias bullish towards 23,600-23,800. Nikkei has also turned stronger than expected and can advance towards 69000 in the coming sessions. Shanghai has bounced from support near 4032 and, while above 4050-4040, can extend its recovery towards 4100-4125.

Brent and WTI continue to strengthen in line with expectations and can rise further towards $100 if geopolitical tensions remain elevated. Gold and Silver are likely to remain range-bound within $4400-$4600 and $70-$80 respectively. Copper has turned bullish after breaking above $6.60 and can extend gains towards $6.75-$6.80 in the near term. Natural Gas remains weak and could test the key $3.00 support in the coming sessions.


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Author

Vikram Murarka

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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