The DXY strengthened as the markets reacted positively on the nomination of Kevin Warsh as next FED chair. The DXY need to break past 97.50 to rise towards 98 and higher. EURUSD is expected to fall towards 1.18 or lower while it trades below 1.20. EURINR can have upside capped at 110-111 levels. EURJPY can hold the 182-186 range for now. USDJPY need to see a sustained rise past 155 to target 156-157 levels in the near term. USDCNY is stuck between 6.94-6.96 region. Aussie can trade within 0.69-0.71 region. While Pound can attempt to bounce towards 1.38 if it sustained above 1.36. USDINR is trading higher within 91.50-92.00 region. A break above 92 can take it higher towards 92.25-92.50. IN Manufacturing PMI & US Manufacturing ISM data are scheduled for release today.

Dollar Index (97.08) rose well and while it holds above 96, a test of 98 or higher looks likely in the near term. A decisive break above 97.50 will confirm the upside.

EURUSD (1.1868) is coming off as anticipated and the ongoing fall can get extended towards 1.18 or slightly lower in the coming sessions. Any rise from current levels if seen, can be limited to 1.20 for now.

EURINR (109.1368) initially declined to the low of 108.48 but has currently recovered well. Even if the rise extends further, the upside looks capped at 110-111 levels.

EURJPY (184.01) can rise within the 182-184/186 range which is expected to hold for some time before a breakout is seen on either side.

Dollar-Yen (154.98) has come off from the high of 155.51. A sustained move above 155 is needed to target 156-157 in the near term; otherwise, the pair could slip towards 154-153 initially before attempting a rebound.

USDCNY (6.9497) is stuck between 6.94-6.96 region since the last few sessions. The target of 6.90 is kept open while the pair trades below 7.00 level.

Aussie (0.6949) tested the low of 0.6920 before rebounding. A decisive break below 0.69 is needed to open further downside. Otherwise, holding above 0.6920 could keep the pair ranged between 0.69-0.71 region.

Pound (1.3687) has interim support near 1.36, and while it holds, the pair can attempt a rebound towards 1.38. A break below 1.36 would be needed to turn the near-term outlook more bearish.

USDINR (91.95) is holding the 91.50-92.00 range for now. A sustained break above 92 can push it higher towards 92.25-92.50 levels.

The US Treasury yields sustain higher but stable. For now, the yields are inside a range and can rise within that. Eventually we can expect a bullish breakout of this range going forward. The German yields are also stable. While the immediate outlook is unclear, the danger of seeing a fall is still alive. We will have to wait and see. The 10Yr GoI seems to be struggling to rise back. A near-term dip can be seen.

The US 10Yr (4.25%) and 30Yr (4.89%) Treasury yields remain higher but stable. 42%-4.3%/4.35% (10Yr) and 4.8%-4.95% (30Yr) is the trading range for now and the yields can rise within that now. The bias is positive to see a bullish breakout of this range eventually.

The German 10Yr (2.84%) and 30Yr (3.49%) yields continue to remain stable. We remain cautious to see a fall to 2.75%-2.7% (10Yr) and 2.35% (30Yr).

The 10Yr GoI (6.6963%) has dipped further and seems to be struggling to rise more. A dip to 6.65%-6.63% looks possible in the near term.

The Dow declined sharply after Trump said he would nominate Kevin Warsh to lead the Federal Reserve. Support at 48500 needs to hold to take the index back to higher levels slowly. The Dax is headed towards 24800-25000. Nifty has tanked after the announcement of STT on derivatives segment in the Union Budget released yesterday. The index may trade within 24400-25000 for sometime. Nikkei could rise towards 54000/55000 while above support near 52000/53000. Shanghai can move back towards 4100-4200 while above 4050. A break below 4050, if seen will make it vulnerable to medium term bearishness. Watch price action near 4050.

The Dow(48892.47, -0.36%) declined back below 49000 as Trump said he would nominate Kevin Warsh to lead the Federal Reserve. The index can re-test support at 48500 but while 48500 holds, near term trade zone of 48500-50000/52000 is likely to hold.

DAX (24538.81, +0.94%) has risen and can test 24800-25000. Thereafter, a break past 25000 is needed for a further rise to 25500.

Nifty (24825.45, -2.33%) slid yesterday, contrary to our expectations of a rise towards 26000, after the Indian Union Budget that proposed STT on derivatives segment. The index now below 25000 might struggle to rise immediately and could spend a couple of days in the 24400-25000 range before eventually moving up.

Nikkei (53721.83, +0.75%) seems to be holding the rising momentum and can test 54000-55000 soon.

Shanghai (4096.93, -0.51%) has declined towards 4050, the lower end of our expected trade range of 4200-4050. While above 4050, the index could attempt to rise back towards the upper end of the range soon. Only a break below 4050, if seen can make the index vulnerable to a decline.

Crude prices have weakened, with Brent easing towards $ 64 and WTI likely to drift lower towards $ 60. Gold and silver have corrected sharply and are testing key supports, where a hold could lead to near-term stabilisation, while a break would deepen the bearish bias. Copper has slipped below immediate support and may extend its decline towards $ 5.5–$ 5.4. Natural Gas needs to hold above $ 3.5 to revive a bounce towards $ 4.5–$ 5.0.

Brent ($ 66.77) has fallen sharply as it could not sustain higher levels after President Trump toned down war rhetoric over Iran. He said he had overnight discussions with Iran and expects talks to continue, easing concerns of an imminent US attack. A further fall towards $ 64 can be seen in the near term.

WTI ($ 62.75) has reverted sharply as it failed to sustain above $ 66. A further decline towards $ 60 can be seen in the coming sessions.

Gold ($ 4748.80) contrary to our expectations, has fallen sharply by 11% and tested a low of $ 4700 on Friday. Today it has seen a low of $ 4604, where near-term support is emerging. If this support holds, prices can stabilise towards $ 4800-$ 5000 in the coming weeks. Else, a break below this can turn the trend bearish towards $ 4400-$ 4200.

Silver ($ 80.10) has plunged by 31% and fell to a low of $ 74 due to heavy selling and profit-taking on Friday. Immediate support is seen near $ 75-$ 70. If this holds, prices can stabilise for some time. Else, a break below this support can turn the price further bearish towards $ 65-$ 60.

Copper ($ 5.76) has fallen sharply to $ 5.76 on Friday, contrary to our expectations. It has broken below immediate support, and if it sustains lower, a further decline towards $ 5.5-$ 5.4 can be seen in the near term.

Natural Gas ($ 3.7120) broke above $ 4 and surged to $ 4.42 on Friday. However, it has opened lower today with a gap down at $ 3.70. As long as it trades above $ 3.5, a bounce back towards $ 4.5-$ 5.0 can be seen over the coming weeks.

GMT 0:30 IST 06:00 JP PMI
…Expectations 51.5 …Previous 50.0

GMT 1:45 IST 07:15 CN PMI
…Expectations 50.1 …Previous 50.1

GMT 5:00 IST 10:30 IN Manufacturing PMI
…Expectations 56.8 …Previous 55.0

GMT 8:30 IST 14:00 CH PMI
…Expectations 47.2 …Previous 45.8

GMT 9:00 IST 14:30 EU PMI
…Expectations 49.4 …Previous 48.8

GMT 9:30 IST 15:00 UK PMI
…Expectations 51.6 …Previous 50.6

GMT 14:30 IST 20:00 CA PMI
…Previous 48.6

GMT 15:00 IST 20:30 US Manufacturing ISM
… 48.4 …Expectations 48.5 …Previous 47.9

DATA LAST FRIDAY
================
GMT 1:30 IST 07:00 AU PPI
…Expectations 1.1 …Previous 1.0 …Actual 0.8

GMT 23:30 IST 05:00 JP Unemp
…Expectations 2.6 …Previous 2.6 …Actual 2.6

GMT 10:00 IST 15:30 EU Unemp
…Expectations 6.3 …Previous 6.3 …Actual 6.2

GMT 13:30 IST 19:00 US PPI
…Expectations 0.2 …Previous 0.2 …Actual 0.5

GMT 13:30 IST 19:00 US PPI ex Food & Energy
…Expectations 0.3 …Previous 0.0 …Actual 0.7