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Morning briefing: The US treasury yields have come down

The Dollar index looks stable while Euro has paused above 1.1450. USDJPY and EURJPY look bullish from current levels while EURINR needs to break below 109.90/75 to fall further towards 109, else can bounce back from here itself. Aussie looks bullish towards 0.72/73 while Pound could have scope for an initial decline for the next few sessions towards 1.33 or lower. USDCNY has broken 6.70 and if it manages to sustain lower, it can test 6.69 as well soon. USDINR came off sharply from 96.0925 yesterday on possible RBI intervention to sell dollars. If the dip sustains, we may see a fall towards 95.50. However, on the charts, there is still room for a test of 96.50 on the upside.

The US Treasury Yields have come down. Failure to rise back immediately can trigger a corrective fall. Thereafter, the broader uptrend can resume. The German Yields have also come down. But there is limited room on the downside. They can test their support and then rise back again. Outlook remains bullish. The 10Yr GoI remains lower. A near-term dip looks more likely before the yield rises back again.

Dow remains vulnerable below 53000, with a break below 52000 opening the way towards 51000. DAX needs to break above 26000 for a rise towards 26250-26500. Nifty needs to sustain above 23500 to turn bullish, otherwise it remains vulnerable towards 23000. Nikkei remains weak below 65000 and can decline towards 63000-62000. Shanghai can remain range-bound between 3850-3950 while below 3950.

Brent and WTI have fallen sharply as Middle East supply disruptions show signs of easing. Further declines towards $100-$98 and $95-$90 respectively remain possible. Gold has bounced back and can rise towards $4500-$4600 while above $4300. Silver can rise towards $68-$70 while above $63. Copper remains positive and can test $6.80-$6.85. Natural Gas is likely to remain range-bound between $2.80-$3.00.


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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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