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Morning briefing: The US treasury yields have inched up further

Most currencies look range-bound. The Dollar Index may test 99.40, holding above 99, while EURUSD and Dollar-Yen appear steady within 1.1680-1.1640 and 160-159. USDCNY has broken below 6.72 and could now be headed towards 6.70 soon. EURINR and EURJPY remain near key resistance levels, while Aussie needs a sustained break above 0.72 to target 0.73. Pound must hold above 1.36 to avoid decline to 1.3550-1.35. USDINR remains mixed, with Rupee strength dependent on a decisive move below 95.50. Else a rally back to 95.75/80 can be witnessed.

The US Treasury Yields have inched up further. The 10Yr can move up within its range and make a bullish breakout eventually. The 30Yr can also rise further from here. Market will closely watch the speech of Kevin Warsh in the Jackson Hole summit today evening. The German Yields have risen further. That keeps intact the overall bullish bias. The yields can rise more from here. The 10Yr GoI has risen sharply. It has room to rise further and test its resistance from here. Thereafter it can turn down again.

Global equities remain mixed. Dow can rise towards 54000, with a breakout opening further upside, while failure could trigger a pullback towards 53000 or lower. DAX is attempting to sustain above 26500 and can extend its rally towards 26750-27000. Nifty remains weak below 24100 and needs to reclaim this level to bring 24400 back into focus. Nikkei can rise towards 67500-68000, while Shanghai remains positive above 3850 and can advance towards 4000-4050.

Brent and WTI have moved higher, while their broader ranges of $80-$95 and $75-$90 respectively remain intact. Gold has dipped but remains bullish towards $4750-$4800, while Silver can break above $70 and rise towards $72-$75. Copper has recovered after testing $6.53 and is likely to remain range-bound between $6.50-$6.80 while below $6.80. Natural Gas remains constructive near $3.00, with a sustained break above this level opening the way towards $3.20-$3.50.


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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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