BOE cut rates by 25bps to 5% taking Pound sharply down to 1.2726. It can extend its fall to 1.27/26 before halting. Dollar Index has bounced from 103.80 while Euro can head towards 1.0750/07. US NFP and Unemployment data is crucial to watch today. USDJPY and EURJPY have risen slightly but overall trend remains bearish. USDCNY could trade within 7.2550-7.21/20 with a bearish bias for the near term. USDINR has risen well from 83.64 and continues to look bullish above 83.70. EURINR can dip to 90-89.50 before halting the current fall.

Dollar Index (104.401) bounced well from the mentioned support around 103.80 as the Bank of England cut rates by 25-bps to 5% leading to Dollar strength. Now while the support holds, the index may rise towards 105 or higher in the coming sessions. Watch out for US NFP and Unemployment data release scheduled today which can keep the volatility in the index intact.

EURUSD (1.0787) slipped below 1.08 and our caution for pair heading towards 1.0750-1.07 seems to be working well or now. If the Dollar strengthens post US NFP today, then the expected target could be tested soon before the pair bottoms out.

Dollar-Yen (149.58) and EURJPY (161.34) tested 148.50 and 160.64 on the downside before slightly recovering from there. A decisive rise past supports of 152 and 164 respectively will be needed to make the outlook bullish. Else, a break below 150 on USDJPY will drag it lower towards support near 145/142 while EURJPY can test 158 before pausing the current fall.

USDCNY (7.2326) rose to 2.2472 before coming off from there. The pair needs to necessarily rise and sustain past 7.2550 to bring 7.27/28 into the picture. Until then, we may expect volatility between 7.2550/25-7.21/20 with a near term bearish bias.

The Bank of England announced a rate cut of 25 bps to 5% taking Pound (1.2718) sharply down below our mentioned near term target of 1.28. It can extend down to 1.26 before halting the current decline.

Aussie (0.6503) also fell to 0.6486 but has recovered from there. While below 0.66, we may expect the trade range to continue within 0.66-0.64.

USDINR (83.7225) recovered from 83.64 in a single session, making a high of 83.76. Volatility may continue to hold above 83.65/67 with a bullish bias of testing 83.80/90 soon.

EURINR (90.3557) has been coming off and can soon test 90-89.50 in the near term before attempting to rise back.

The US Treasury yields have declined further sharply, breaking below their support. While this break sustains, there is room to fall more, and the expected bounce will get negated. The German yields are coming down in line with our expectation. The bearish view is intact. The 10Yr and 5Yr GoI are coming down gradually. The broader view remains bearish. It is not clear whether the yields will get a corrective bounce from here or will fall straightaway.

The US 10Yr (3.96%) and the 30Yr (4.26%) yields have declined further sharply. The 10Yr has declined below 4%. While this break sustains, a further fall to 3.8% is possible in the coming weeks. The 30Yr on the other hand, can fall to 4.1% while below 4.3%.

The German 10Yr (2.24%) and the 30Yr (2.46%) yields are coming down towards 2.2% (10Yr) and 2.4% (30Y) in line with our expectation. The price action thereafter will need a watch to see if a reversal is happening or not.

The 10Yr GoI (6.9166%) has bounced from the low of 6.9045. The view remains bearish to see 6.85% and lower levels. Upside could be capped at 6.94% or 6.98% (maximum).

The 5Yr GoI (6.8308%) on the other hand is holding above 6.82%. The view remains bearish for a fall to 6.7%. It has to rise past 6.85% to get a corrective rise to 6.9%.

Weaker than expected US economic data such as Higher Unemployment claims and lower US ISM Manufacturing PMI have led to sharp fall in most of the stocks. Dow Jones and Nikkei have fallen sharply but have got near term support which if holds can produce a bounce back. DAX has fallen towards 18000 and might fall further towards 17800-17700. Nifty can fall back taking cues from the sell-off in the global markets. Shanghai has dipped further and will remain bearish while below the resistance at 2950.

Dow (40347.97, -1.21%) tumbled to a low of 40098 and then has recovered slightly from there. 40000-39900 is a crucial support which if broken can drag it down to 39500-39200. That in turn will negate the rise to 42000 for now.

DAX (18083.05, -2.30%) has tumbled below 18400. While below 18200 there is room to see 17800-17700 from here. Our bullish view of seeing a rise to 18600-18800 stands negated now.

Nifty (25010.90, +0.239%) can fall back towards 24750 taking cues from the sell-off in the global markets. Need to see if it sustains above 24750 or extends the fall to 24500.

As expected, Nikkei (36288.00, -4.75%) has fallen sharply towards 36000. Key support is seen at 35000. While that holds, a bounce back towards 37000-38000 can be seen.

Shanghai (2928.13, -0.13%) has come down further as the resistance at 2950 seems to be holding well. A fall 2900 or even lower to 2850-2800 is possible while below 2950.

Commodities have fallen back after seeing a decent rise due to the release of weaker than expected US ISM Manufacturing PMI data but all have key immediate support, while above which, a rise back is possible.

Brent ($ 79.98) and WTI ($ 75.83) has fallen back sharply but as long as the support at $ 78 (Brent) and $ 74 (WTI) holds, a rise towards $ 83 (Brent) and $ 80 (WTI) could be seen.

Gold (2495.20) struggles to rise past 2500. Immediate support is seen at 2460-2440. While that holds, a rise towards 2530-2550 is possible.

Silver (28.73) has fallen back after testing a high of 29.29 but has support at 27.50, while above which, a rise towards 29.50-30.00 might be seen.

Copper (4.0755) has come down failing to rise past 4.20. If it manages to sustain above 4.0, then a rise towards 4.3-4.4 could be seen. But failure to hold above 4.0 can drag it down to 3.85-3.80.

Natural Gas (1.9680) has declined below 2.00 but we expect the support at 1.9 to hold and produce a bounce back towards 2.4-2.5.

1:30 07:00 AU PPI
Expn – …Expected 1.0% …Previous 0.9%

6:30 12:00 CH CPI
Expn 1.5 …Expected -0.2 …Previous 1.3

7:30 13:00 CH PMI
Expn 44.7 …Expected 42.6 …Previous 43.9

12:30 18:00 US NFP
Expn 222K …Expected 177K …Previous 206K

12:30 18:00 US Unemployment Rate
Expn 3.8% …Expected 4.1% …Previous 4.1%

12:30 18:00 US Avg Hrly Earnings
Expn 0.4 …Expected 0.2 …Previous 0.3

12:30 18:00 US Average Hourly Earnings Production & Non Supervisory Employees
Expn 0.2 …Expected – …Previous 0.3

Data Yesterday
…………..
0:30 06:00 JP PMI
Expn 49.4 …Expected 49.2 …Previous 50.0 …Actual 49.1

1:30 07:00 Australia Trade Balance
Expn – …Expected 5.0 …Previous 5.1 …Actual 5.6

1:45 07:15 CN PMI
Expn 52.0 …Expected 51.6 …Previous 51.8 …Actual 49.8

5:00 10:30 IN Manufacturing PMI
Expn 59.0 …Expected – …Previous 58.3 …Actual 58.1

8:00 13:30 EU PMI
Expn – …Expected 45.6 …Previous 45.6 …Actual 45.8

8:30 14:00 UK PMI
Expn 51.5 …Expected 51.8 …Previous 50.9 …Actual 52.1

9:00 14:30 EU Unemp
Expn 6.4% …Expected 6.4 …Previous 6.4 …Actual 6.5

11:00 16:30 BOE Mtg
Expn – …Expected 5.00% …Previous 5.25 …Actual 5.00

11:00 16:30 UK BOE Minutes
Expn – …Expected 0-6-3 …Previous 0-2-7 …Actual 0-5-4

13:30 19:00 CA PMI
Expn – …Expected – …Previous 49.3 …Actual 47.8

14:00 19:30 US Manufacturing ISM
Expn 49.3 …Expected 48.8 …Previous 48.5 …Actual 46.8