The Dollar Index initially rose to the high of 104.43, led by stronger US ADP Employment release but later started coming on lower-than-expected US GDP. Only a sustained rise past 104.50 can take it higher towards 105-105.50. Overall, the view remains bearish towards 103.00-102.50. Euro and EURINR have risen well within the respective ranges of 1.0775-1.0850/09 and 90.50/90-91.50, while the Pound can test 1.2900. The expected rise in USDJPY and EURJPY to 155 and 168 cannot be fully ruled out until a strong break below current levels is seen. Watch out for the BOJ policy meeting scheduled today where the interest rates are likely to remain steady at 0.25%. Aussie can fall towards 0.65-0.6470 region before attempting to bounce back higher. USDCNY is widely ranged within 7.1450-7.11 region. USDINR, if opens near 84.08 can rise towards 84.10/12. Overall, the range of 84.00-84.12 can remain intact. Watch out for the US PCE and Personal Income data release scheduled today and NFP tomorrow.

The stronger US ADP employment at 233K (101K) took Dollar Index (104.195) higher to the level of 104.43 but could not sustain as the US GDP came out lower than expected at 2.8% (3%). The index needs to sustain its rise past 104.50 to test 105-105.50. Else, the overall outlook could be bearish for a fall towards 103-102.50. Watch US Personal Income and PCE data release scheduled today.

EURUSD (1.0848) rose sharply to the high of 1.0871 as the Dollar weakened post lower US GDP data. Still a break on either side of its immediate range of 1.0775-1.0850/1.09 will be needed for better clarity. Until then, the mentioned range can persist for a while.

Dollar-Yen (153.45) and EURJPY (166.49) look weak ahead of the BOJ policy meeting scheduled today. The central bank is widely expected to keep the interest rates steady at 0.25% but it would be important to see whether they announce any future roadmap for the policy. We are retaining our view of a rise to 154-155 (USDJPY) and 168 (EURJPY) respectively until a sharp fall is seen.

USDCNY (7.1210) has widely remained volatile within 7.1450-7.1100 region since the last few sessions. We are keeping our targets intact of testing 7.1751 on the upside and 7.10 or even lower if it fails to sustain above current levels.

Aussie (0.6571) observed a low of 0.6536 before recovering a bit from there. Immediate support is coming around 0.6500-0.6470 region which can be tested soon before attempting to bounce back again above 0.66.

British finance minister Rachel Reeves delivered the Labour government’s first budget and reiterated the need for tough fiscal measures to help improve Britain’s public finances. Pound (1.2946) has been coming off and is possibly headed towards the lower end of its range of 1.3150-1.2900. Until a decisive break on either side is seen, the range is likely to remain intact.

USDINR (84.0560) on the NDF has dipped below our mentioned support near 84.06. If on the onshore markets, it opens near 84.08 and sustains, then it could test 84.10/12. At the same time, we need to be cautious for any sudden dip towards the lower end of the mentioned range of 84.00-84.12

EURINR (91.2321) observed a significant rise to the level of 91.4263. A confirmed break past 91.50 if seen, can take it higher to 92-93. For now, the immediate range of 90.50/90-91.50 can hold in the near term.

The US Treasury yields continue to move up in line with our expectation. The bullish view is intact. There is room to rise further before the broader downtrend resumes. The US PCE (2.37% (YoY) in September) data release today will be important. A low PCE number can be negative for the yields. The German yields are coming closer to their resistance. The price action in the coming days will need a close watch to see if a reversal is happening or not. The 10Yr GoI has come down into its previous narrow range again. The sideways consolidation can remain in place for some time before a rise happens. Bias remains bullish.

The US 10Yr (4.28%) continue to move up while the 30Yr (4.49%) remains stable. The 10Yr is heading up towards 4.4% inline with our expectation. The 30Yr can rise to 4.6% on a break above 4.5%. Thereafter the downtrend can resume.

The German 10Yr (2.39%) yield has moved up and the 30Yr (2.62%) remains stable. The 10Yr has come up to 2.4% as expected while the 30Yr has room to test 2.7%. The price action in the next few days will need a watch to see if a reversal is happening or not.

The 10Yr GoI (6.8271%) has come down into the 6.8%-6.85% range again. A further dip is possible from here. While above 6.8%, the broader view remains bullish to see 6.9%-7% on the upside.

Global equity indices remain under pressure, closing near the recent session lower. The Dow Jones faced resistance near 42500, subsequently retreating below 42200. However, while support at 42000-41800 holds, the index retains a bullish outlook with a potential upside toward 43,500-44,000. The DAX index tested key support at 19200, briefly dipping to 19201 before partially recovering. A further test of 19000 is possible before a potential rebound towards 19800-20000. In India, the Nifty index continues to show weakness, unable to gain above 24500. While trading below 24600, the index remains vulnerable to further declines toward 24000 or lower. Japan’s Nikkei index opened lower but remains above the 39000 level, keeping the near-term outlook positive, with the potential to advance to 40,000 and beyond. Meanwhile, the Shanghai Composite trades near the lower boundary of its current range at 3250. This range could hold with movement between 3250 and 3350; however, a breakdown below 3250 may prompt a further decline toward 3200-3150.

The Dow (42,141.54, -0.22%) remains stuck between 42000 and 42600. Support is in the 42000-41800 region. While that holds, the bullish view is intact to see 43500-44000. The view will go wrong if 41800 is broken in which case a fall to 41000 can be seen.

DAX (19257.34, -1.13%) has declined below 19300. A fall to 19000 looks possible first before the uptrend resumes to target 19800-20000.

Nifty (24,340.85, -0.51%) is stuck between 24000 and 24500. Need to wait for a breakout of this range to get clarity on the next move. For now, the trend is down. That leaves the bias negative to get a break and fall below 24000 going forward. We will have to wait and see

Nikkei (39116.44,-0.41%) dipped slightly but remains above 39,000, maintaining our positive outlook for a potential move towards 40,000. A breakout above 40,000 could pave the way for an extended target of around 42,000.

Shanghai (3275.4824, +0.25%) tested the lower boundary of its sideways range at 3250-3350 and has since rebounded. The index is likely to remain within this range over the coming sessions. Only a break below 3250 would enforce a fall towards 3200-3150.

Crude prices saw some recovery after the US weekly EIA report showed a draw in the crude stockpiles. Near term view remains intact to see a fall towards support levels of $ 68 on Brent and $ 65 on WTI. Gold tested its immediate resistance and could fall back to 2750 in the near term before continuing its uptrend. Silver has fallen but could bounce back to 35.0-35.5 while above 33.5. Cooper remains ranged between 4.43-4.30 for some time. Natural Gas looks bearish towards 2.6-2.4.

Brent ($ 72.43) saw a slight recovery to $ 73 yesterday after the weekly EIA report showed crude inventories having a draw of -515,000 barrels, against a +1.37m/b build forecast. The outlook remains bearish towards $ 68 for the near term before a rise to $ 74-75 takes place.

WTI ($ 68.87) rose slightly but the outlook remains same to see a fall towards its interim support near $ 65 in the near term. Thereafter, the support can hold and push it back towards $ 70-72.

Gold $ 2796.10) tested 2,801 in line with our expectations. While the resistance at 2800 holds, a fall to 2750 can be seen in the near term. Only a sustained break above 2800 could take it further up towards 2850-2900 but that looks less likely for now.

Silver (33.77) tested a high of 34.69 but has fallen back from there. Immediate support is at 33.5 above which a rise towards 35.0-35.5 remains intact for the near term.

Copper (4.3580) trades within our mentioned range of 4.43-4.30 which can continue for some time before a rise to 4.5-4.6 takes place.

Natural Gas (2.8230) dipped as expected due to the Warm US Autumn temperature. While below 3 it can fall towards 2.6-2.4 in the near term.

3:00 08:30 BOJ Meeting
… Exp – … Expected 0.25% … Previous 0.25%

9:00 14:30 EU Unemp
… Exp – … Expected 6.4% … Previous 6.4%

12:30 18:00 US Personal Income
… Exp 0.3% … Expected 0.3% … Previous 0.2%

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

12:30 18:00 US PCE
… Exp 0.2 … Expected 0.1 … Previous 0.1

12:30 18:00 CA GDP
… Exp – … Expected 0.1% … Previous 0.2%

DATA ON YESTERDAY:
—————–
0:30 06:00 AU CPI
… Exp 3.0% … Expected 2.3% … Previous 2.7% …Actual 2.1%

9:00 14:30 EU Biz Climate
… Exp – … Expected 96.4 … Previous 96.2

12:15 17:45 US ADP Emp
… Exp – … Expected 101.0K … Previous 159.0K …Actual 233.0K

12:30 18:00 US GDP
… Exp – … Expected 3.0% … Previous 3.0% …Actual 2.8%