Morning briefing: The US treasury yields have risen sharply

Escalation in the middle east tensions may continue to impact the forex markets as the US has refused to extend its MOU with Iran. The Dollar Index needs to sustain above 99.50 to prevent a decline to 99-98.50 again and instead rise to 100 and higher in the coming days which could keep Euro intact below 1.16. EURJPY is bullish towards 185/186 while above 184; USDJPY looks positive for a slow rise towards 160; USDCNY is likely to hold above 6.74 for sometime before resuming its downtrend. Aussie could attempt to rise while above 0.71 but it could be short lived as the spot would soon fall back towards 0.70 or lower. Pound can target 1.36/37 while above 1.35. EURINR will have to sustain a break above 111 to move up further. USDINR can be bullish along with the rising crude prices as correlation with the crude prices holds strong at the moment.

The US Treasury Yields have risen sharply. The expected rise seems to be happening a little faster than expected. Need to see if we are getting a correction after this rise or an extended upmove. The German Yields are moving up as expected. The bullish view is intact, and the yields can rise more. The 10Yr GoI has risen back sharply. If this sustains, then the yields can rise more. Our bearish view will get negated only if the yield gets a sustained rise above 6.9%.

Global equities have weakened amid heightened tensions in the Middle East. Dow can decline towards 53000 while remaining within the broader 53000-55000 range, while DAX can fall further towards 26000. Nifty remains weak below 24300 and can decline towards 24100-24000, with a move above 24300 needed to revive the bullish outlook towards 24400-24500. Nikkei has fallen sharply but can retain its bullish bias towards 70000 while above 66000. Shanghai remains stronger above 3900 and can rise towards 4000-4050.

Brent and WTI are moving higher but likely to remain range-bound within $80-$95 and $75-$90 respectively until a breakout provides further direction. Gold remains bullish above $4200 and can rise towards $4600 and higher on a break above $4500. Silver can advance towards $70-$75, while Copper is likely to consolidate within the $6.50-$6.75 range until a breakout. Natural Gas has recovered and can rise towards $2.75-$2.80 while holding above the key $2.60 support.