On Monday (7th August), FED Governor Michele Bowman said that additional interest rate hikes will likely be needed to lower inflation to the 2% target of the central bank while Philadelphia Fed President Patrick Harker said yesterday that the central bank could be at a position to hold rates steady in absence of any alarming new data between now and mid-Sep’23. Mixed views continue to pour in while most forecasters now believe that the rate hike cycle could be nearing to an end. The Dollar Index holds steady within 101.75-103 region and could continue this range trade within these levels for some more time. Euro may trade within 1.1020-1.0910. Pound and Aussie can trade within 1.26-1.28 and 0.65-0.66 region. USDJPY is moving up towards 144 while EURJPY can face resistance near 158. USDCNY can test 7.25 while above 7.18/20. USDRUB has risen sharply towards 98 and can soon move higher. EURINR can dip to 90.50/40 before again bouncing back. USDINR can trade within 82.70/60-82.90 region. Watch RBI policy rate decision tomorrow.

Dollar Index (102.488) tested 102.796 yesterday but came off sharply from there. Immediate range of 101-103 may hold.

EURUSD (1.0964) may trade within 1.1020-1.0910 over the next few sessions.

EURJPY (157.10) is rising towards the upper end of the 155-158 region and can dip from 158 soon. Only a break above 158, if seen can take the pair sharply up towards 159/160 in the medium term.

Dollar-Yen (143.23) has been moving up towards 144. Immediate range of 144-141 may hold. A break above 144 is needed for the pair to move up towards 145-146.

USDCNY (7.2106) can test 7.25 while above 7.18/20.

Pound (1.2748) and Aussie (0.6549) dipped sharply to test 1.2685 and 0.64968 yesterday but has recovered well. Overall broad range of 1.26-1.28 and 0.65-0.66 could hold for the next couple of sessions.

USDRUB (97.1396) has moved up again as expected and can move beyond 98 soon.

USDINR (82.8325) could trade within 82.90-82.70/60 region for a while unless further clarity is seen on direction from here. RBI’s monetary policy decision is due tomorrow.

EURINR (90.8482) fell from 91.1518 yesterday. Overall can see a dip to 90.50/40 before again moving up.

The US Treasury yields have come down. Failure to rise back immediately can drag the yields further lower ahead of the US CPI data release tomorrow. The German yields have come down sharply and are back into their respective range. We will have to wait and see whether the yields can rise back or will fall further within their range. The 10Yr and 5Yr GoI have dipped but supports can limit the downside and keep the broader bullish view intact.

The US 10Yr (4%) and the 30Yr (4.18%) have come down. A further fall from here will reduce/delay the chances of the 10Yr rising past 4.2% and will drag it down to 3.9%-3.85%. The 30Yr can dip to 4.1%-4% if it fails to rise back above 4.2% immediately.

The German 10Yr (2.46%) and the 30Yr (2.54%) yields have declined sharply. The 10Yr and 30Yr are back into their 2.1%-2.5% and 2.1%-2.65% range. It will have to be seen if they can rise back from here or not.

The 10Yr GoI (7.1643%) has come down. It can test the support at 7.14% before reversing higher towards 7.2% and higher going forward. While above 7.1% the outlook is bullish to see 7.3%-7.35% in the coming weeks.

The 5Yr GOI (7.1416%) has dipped into the 7.15%-7.1% support zone. While above 7.1% the bias is bullish to break 7.2% and rise to 7.4%-7.45% over the medium-term.

Dow and Nikkei looks bullish to see a rally on the upside while above the support at 35000 (Dow) and 32500-31500 (Nikkei), respectively. DAX and Nifty looks bearish for the near term. Shanghai can come down to test 3225 before a bounce back is seen.

Dow (35314.49, -0.45%) , though closed lower, had recovered well from the intraday low of 35007. While above 35000, the chances are high for it to breach 35600 and rise to 36000.

DAX (15744.93, -1.1%) had declined below 15800. A test of 15500 is likely before a reversal is seen.

Nifty (19570.85, -0.13%) seems to lack strength to breach 19700. While below 19700, it can remain vulnerable to see 19200-19000 on the downside first before reversing higher again.

Nikkei (32314.71, -0.19%) struggles to move up above 32500 but while above 32000-31500, there is a potential for a rise towards 33500.

Shanghai (3254.44, -0.19%) remains subdued. It may come down to test 3225 before bouncing back from there.

Crude prices remain positive for a test of their key resistance in the near term. Gold, Silver and Copper continues to dip and have room to come down further from here. Natural gas needs to surpass the hurdle at 3.8 to strengthen the bullish momentum further.

Brent ($ 86.03) came down to a low of $ 83.32 yesterday and has risen back sharply from there. Outlook will remain bullish to see a rise to $ 88-89 while it remains above $ 83.

WTI ($ 82.75) fell to a low of $ 79.90 yesterday and has bounced back sharply from there. Bias remain positive to see a test of $ 84-85 as long as it sustain above $ 81-80.

Gold (1962.40) continues to dip. It may see a test of 1940-1930 before a reversal is seen.

Silver (22.93) has broken below the support at 23. While this break sustains, it can come down to test 22 before a bounce back can happen.

Copper (3.7880) has fallen sharply below 3.8. It may come down towards 3.70-3.65 in the near term. Upside looks capped at 3.85.

Natural Gas (2.7870) has risen well towards 2.8 as expected. A sustained break above it could pave the way towards 3.0. Else it can fall back towards 2.6.

1:30 7:00 CN CPI (YoY)
Expn – …Expected -0.5 …Previous 0.0

1:30 7:00 CN PPI
Expn – …Expected -4.0 …Previous -5.4

DATA YESTERDAY:
—————–
12:30 18:00 US Trade Balance
Expn -66.09$ …Expected -65.1$ …Previous -68.89$ …Actual – 65.50$