The ECB kept rates unchanged yesterday indicating that the latest inflation data has come down and could be slowly headed towards the 2% target while the current borrowing costs are just enough to control inflation if the rates are unchanged for “sufficiently long” time, suggesting no more rate cuts for the next few months at least. Dollar Index needs to break past 107 to test 108 else can be ranged within 107-106 while Euro may trade within 1.05-1.07. EURJPY may test 160 while above 158. USDJPY trades above 150 and needs to sustain to head towards 151/152. USDCNY is stable and could hover near 7.30/32 region. Unless a break above 7.32 is seen, the bullish view may get delayed. Pound can trade within 1.22-1.20 while Aussie can trade within 0.62-0.64. USDRUB can hold above immediate support at 92.50 and rise towards 94-96. USDINR may trade within 83.00-83.30 with decent support in the 82.80-83.00 region. EURINR can trade within 87.50-88.50

Dollar Index (106.55) rose to 106.89 yesterday before coming off slightly from there. While below 107, we may expect a dip back towards 106 or lower. But if the index manages to break above 107, it can test 108 before showing a stronger reversal.

EURUSD (1.0563) fell to 1.0522 but has bounced back. A break past 1.06 is needed for the Euro to rise toward 1.07 else, Euro could trade within 1.07-1.05 for the next few sessions.

EURJPY (158.64) has bounced well from immediate support at 158 and is expected to rise towards 160 in the coming sessions.

Dollar-Yen (150.17) is finally trading above 150 and needs to sustain to rise towards 151/152 before a crucial reversal is seen.

USDCNY (7.3160) looks stable and needs to rise past 7.32 to move higher else can fall back to 7.30.

Aussie (0.6340) has risen back above 0.63 again but could face rejection from 0.6350-0.64 again. Range of 0.62-0.64 may hold for the next 1-week.

Pound (1.2137) has bounced from 1.2070 but a fall to 1.20 cannot be negated just yet. A maximum rise to 1.22 is possible within the current move followed by a fall to 1.20 in the longer run. Broad range of 1.22-1.20 is likely to hold for the medium term.

USDRUB (93.6720) is holding above 92 for now and needs to rise past 96-98 to negate a possible fall to 90.

USDINR (83.2350) is likely to trade within 83.30-83.00 for the next few days.

EURINR (87.933) may trade within 87.50-88.50 for the next few days.

The US Treasury yields have come down again. The chances are seeing a corrective fall remains alive before a fresh rise is seen. The German yields broadly remain stable. The view is bullish and there is room to rise more from here. The European Central Bank (ECB) left their policy rates unchanged yesterday. The central bank expects the economic growth to slow down. The 10Yr and 5Yr GoI are moving up within their expected sideways range.

The US 10Yr (4.86%) and the 30Yr (5.01%) yields have come down again. The chances are still alive to test 4.7%-4.6% (10Yr) and 4.8%-4.7% (30Yr) on the downside before targeting 5.1% (10Yr) and 5.2% (30Yr).

The German 10Yr (2.86%) yield has dipped slightly while the 30Yr (3.12%) remain stable. View is bullish to see 3% (10Yr) and 3.2%-3.25% (30Yr).

The 10Yr GoI (7.3667%) and the 5Yr GOI (7.3581%) continue to oscillate within their 7.3%-7.4% and 7.3%-7.4%/7.45% range respectively. They are now attempting to move up within this range.

Dow Jones and Nifty have scope to test their support before a possible bounce back can happen. DAX remain vulnerable. Nikkei has bounced back as the support at 30500 is holding well for now but broader bias is still bearish for a fall in the coming sessions. Shanghai has risen towards its upper end of the range. Need to see if it able to break higher or not.

Dow (32784.30, -0.76%) has declined below 32850 and can now test 32600. The price action thereafter will need a close watch to see if a bounce is happening or not.

DAX (14731.05, -1.08%) is coming down. It looks weak to break 14500 and see an extended fall to 14200-14000.

Nifty (18857.25, -1.39%) can test 18700-18600 and then possibly bounce back towards 19000.

Nikkei (31072.93, +1.54%) has risen back as the support 30500 seems to holding well for now. But bias remains bearish for a fall towards 30000 while it remains below 31500.

Shanghai (2996.01, +0.26%) has risen towards the upper end of the 2900-3000 range. A sustained break above 3000 can take it higher towards 3025-3050.

Brent and WTI have fallen back failing to sustain the rise and appears range bound for the near term. Gold remains higher and has scope to rally on the upside. Silver outlook is bullish while it stays above 22.50. Natural gas has risen well and has scope to test its immediate resistance. Copper is to remain sideways for some time.

Brent ($ 88.74) has fallen back failing to sustain the rise above $ 89. It appears range bound within $ 87-91.

WTI ($ 84.16) too has declined below $ 85 and looks range bound within $ 82-86 for now.

Gold (1997.60) remains higher. View is bullish for a rise towards 2025-2030 while above the support at 1950-1940.

Silver (22.99) has bounced back above 22.80 as the support at 22.50 has held well. While above 22.50, a rise towards 23.50-24 can be seen. Overall a range of 22.50-24 could persist for some time.

Copper (3.6005) is consolidating within 3.65-3.55. We expect it remain sideways within 3.65-3.50 range for a few sessions.

Natural Gas (3.5340) has risen well above our expected level of 3.50. A test of 3.60-3.62 looks possible. A break above 3.60-3.62, if seen, can lead to a further rise towards 3.80-4.00.

1:30 7:00 AU PPI
Expn – …Expected 0.7% …Previous 0.5%

12:30 18:00 US Personal Income
Expn 0.4% …Expected 0.4% …Previous 0.4%

12:30 18:00 US PCE Price Index M/M
Expn 0.2% …Expected 0.3% …Previous 0.1%

DATA YESTERDAY:
————–
11:45 17:15 ECB Mtg
Expn – …Expected 4.50% …Previous 4.50% …Actual 4.50%

12:30 18:00 US Durable Goods Orders
Expn 0.3% …Expected 1.9% …Previous -0.1% …Actual 4.7%

12:30 18:00 US GDP
Expn – …Expected 4.5% …Previous 2.1% …Actual 4.8%