Disappointing PMI from China, lower EU PPI, and voluntary production cuts (1.3mbpd) from Russia and Saudi Arabia extending upto December-23, all together has increased volatility across markets driving US yields higher and taking up US Dollar against major currencies. Dollar Index needs to reverse back from 105 and Euro from 1.07 else the index can be bullish towards 106, taking Euro down to 1.06. Aussie and Pound are bearish towards immediate supports near 0.63 and 1.25 respectively. EURJPY and USDJPY can move higher towards 159-160 and 148/149 respectively while USDCNY looks bullish towards 7.35. USDRUB may face rejection from 98 else can rise towards 99-100. EURINR can be bullish above 89 while USDINR can aim to test 83.30. Need to see if RBI intervenes to prevent Rupee deprecation above 83.30.

Dollar Index (104.74) has risen sharply and if it does not pause at 105, we may have to allow for 106 on the upside which could drag down Euro towards 1.0650/1.06 eventually. Confirmation of a such a movement is needed on a break above 105 on the Dollar Index (less preferred at the moment)

EURUSD (1.0731) has scope to test 1.07 from where a bounce looks possible towards 1.08 or higher. Failure to bounce from 1.07 will drag it down to 1.06 in the longer run from where a stronger reversal can take place. We do not look for a break below 1.06 within the current fall.

EURJPY (158.31) has dipped slightly but overall looks bullish to 159-160 while above 157.

Dollar-Yen (147.54) could face rejection from 148-149 in the near term. Upside is likely to be limited.

USDCNY (7.3102) has risen as expected and could initially test 7.35 within our long term bullish view of seeing a rise towards resistance near 7.38/40 from where a reversal can be expected eventually.

Aussie (0.6375) and Pound (1.2566) are bearish on stronger US Dollar. We may expect an initial fall to 0.63 and 1.25 from where if the respective bounce does not come could trigger further bearishness for the medium term. Watch price action near 0.63 and 1.25 which are expected to hold as immediate supports.

USDRUB (96.74) has to face rejection from 98 else could be bullish towards 99-100 soon. Immediate support is seen near 95/94.

USDINR (83.0450) has managed to close above 83 yesterday breaking sharply above the 82.80-82.50 range. If the RBI does not intervene to bring the spot lower, we may allow for a rise to 83.30.

EURINR (89.0935) has fallen to test support at 89 which if fails to hold, can trigger a fall to 88 or lower in the medium term. But falling Euro and a possible rise in USDINR should be able to keep the EURINR above 89 for the near term.

The US Treasury yields have surged. Our bullish view is intact, and the yields have more room to rise from here. The German yields continue to move up and are keeping intact our bullish view. The yields can rise further. The 10Yr GoI holds higher and remains bullish to rise more. The 5Yr GoI will have to breach its immediate resistance to gain bullish momentum. Else it can remain stuck in its narrow range.

The US 10Yr (4.26%) and the 30Yr (4.37%) yields have risen sharply. They are heading up towards 4.3%-4.4% (10Yr) and 4.4%-4.5% (30Yr) as expected. A corrective dip is possible thereafter before the yields target 4.5%-4.6% (10Yr) and 4.6%-4.7% (30Yr) eventually.

The German 10Yr (2.61%) and the 30Yr (2.75%) yields have risen further and are keeping up our bullish view intact. The yields can target 3%-3.1% on the upside with intermediate dips. Support is at 2.4% (10Yr) and 2.5% (30Yr).

The 10Yr GoI (7.2068%) remained higher but stable. Bias is bullish to see a rise to 7.35% while the 10Yr sustains above the 7.2%-7.18% support zone.

The 5Yr GOI (7.1975%) is inching up slowly. A strong rise above 7.22% is needed to boost the bullish momentum for the rise to 7.3% and 7.45%. For now, the narrow 7.16%-7.22% range remains intact.

Dow Jones has come down and can test key support at 34400 before a bounce back can happen. DAX remains bearish for the near term. Nifty can dip today taking cues from the global markets. Nikkei has broken above the resistance at 33000-33200 and may look to rise more from here. Shanghai has scope to test the support at 3125 before a rise back can be seen.

Dow (34641.97, -0.56%) has come down and can test 34400 – an important support that is expected to hold. Thereafter the Dow can rise back towards 35000 again and keep the broader uptrend intact.

DAX (15771.71, -0.34%) has broken below 15800 as expected and remains vulnerable to see 15500-15400 on the downside.

Nifty (19574.90, +0.24%) can dip today taking cues from the global markets. But supports are at 19500 and 19400 while above which the bias will remain positive to see 19800-20000.

Nikkei (33215.50, +0.68%) has bounced back sharply, breaking above 33000-33200. While the break sustains, it can rise further towards 33500 or higher.

Shanghai (3142.01, -0.39%) has come down further. A test of immediate support at 3125 looks possible. While that holds, a bounce back towards 3200-3225 can be seen. Overall a broad range of 3225-3075 could persist for some time.

Brent and WTI rose sharply to $ 91.18 and $ 88.07 yesterday as Saudi Arabia and Russia announced that the oil production cut which began in July and extended through August and September, will continue till the end of this year and the crude prices have since retreated from yesterday’s high. Saudi Arabia will cut oil production by 1mln barrels per day and Russia will cut output by 300K barrels per day. Gold, Silver, Copper, and Natural gas look bearish to test their immediate support.

Brent ($ 90.19) rose sharply to $ 91.18 yesterday, way beyond our expected level of $ 90-90.50, and has come off from there. Support is at $ 89. While above $ 89, there is scope for a rise towards $ 93-95 in the near term.

WTI ($ 86.77) rose sharply to $ 88.07 yesterday and has come off from there. Support is at $ 85. As long as it remains above $ 85, a rise towards $ 90 looks possible in the near term.

Gold (1950.50) has declined further below 1960. The view is bearish for a fall towards 1940 before a possible bounce back can be seen. However, failure to hold above 1940 can drag it down to 1925-1920.

Silver (23.86) has fallen sharply below 24. A test of 23.70-23.50 looks likely before a pause can be seen. Only a break lower, if seen, can lead to a further fall towards 22.60-22.50.

Copper (3.8315) has bounced back a bit from yesterday’s fall to 3.7940 but remains subdued. Bias is bearish for a fall towards 3.70 while below the resistance at 3.90.

Natural Gas (2.5740) has fallen below 2.6. It may come down to test the support at 2.5 before a bounce back can be seen towards 3.0.

1:30 7:00 AU GDP
Expn – …Expected 0.30% …Previous 0.23%

9:00 14:30 EU Retail Sales
Expn -0.4% …Expected -0.1% …Previous -0.3%

12:30 18:00 US Trade Balance
Expn -62.9$ …Expected -67.9$ …Previous -65.5$

14:00 19:30 BOC Meeting
Expn – …Expected 5.00% …Previous 5.00%

DATA YESTERDAY:
————-
4:30 10:00 RBA Meeting
Expn – …Expected 4.10% …Previous 4.10% …Actual 4.10%

5:00 10:30 IN Services PMI
Expn 60.7 …Expected 61.0 …Previous 62.3 …Actual 60.1