Morning briefing: The US Treasury yields remain lower

Escalating war scenarios in the middle east over the weekend has led to a surge in precious metals and Crude oil prices, weakening the dollar slightly. The DXY tested 98.09 initially but has dipped due to rising commodity prices. This has in turn led to a rise in the Euro which can test 1.18-1.1850 in the near term. EURINR can head towards 108-108.50 while EURJPY can test resistance at 185.35 before falling back towards 183 in the medium term. USDJPY has risen above 156 but weakness in the Dollar if seen can limit the upside for the pair. However, on the charts there is scope for 158 while above 156. USDCNY has moved back above 6.85 and needs to sustain for a rise back towards 6.90 and higher eventually.
The Aussie and Pound can rise towards 0.7150 and 1.36-1.3650 respectively. USDINR is likely to open with a gap up today as offshore quotes at 91.20. However, immediate upside could be capped at 91.25/50.

The US Treasury yields remain lower. They have room to fall further from here before witnessing a reversal. The German yields are coming down towards their support as expected. The price action around their support will need a close watch to gauge the next direction of move. The 10Yr GoI is struggling to rise. That keeps it vulnerable for a near-term dip before seeing a rise.

Dow has declined as expected and may extend the fall towards 48,250–48,000. DAX has slipped to the lower end of its 25,400–25,000 range but can hold between 24,800–25,400 as long as support near 24,800 remains intact. Nifty has fallen in line with expectations and can drift towards 25,000 in the near term. Nikkei has broken below 58,000 contrary to our view and may slide further towards 57,000–56,800. Shanghai continues to rise as anticipated and can head towards 4,185–4,200 in the coming sessions.

Crude prices have turned volatile as fresh clashes in the Middle East and fears of disruption through the Strait of Hormuz pushed oil prices sharply higher. Brent can bounce towards $80–$82 and WTI towards $72–$75 if tensions stay elevated. Gold remains strong and can extend the rise towards $5,400–$5,500. Silver can climb to $95–$100 in the coming weeks. Copper also looks steady with room to rise towards $6.10–$6.20. Natural Gas continues to look weak and may drift lower towards $2.80–$2.60 in the near term.