News that Iran is halting talks with the US and threatens to fully close the Strait of Hormuz is likely to weigh on the currency markets today. Dollar Index has bounced above 99, while the Euro seems to be stuck in the 1.1580-1.1680 region. EURINR may limit its dip to 110.35 and move up towards 111 today if Indian Rupee weakens against the Dollar. EURJPY could dip towards 185 while USDJPY looks bullish for the near term towards 160 or higher. USDCNY is headed towards 6.75. Aussie and Pound can dip to 0.71 and 1.34/3350, respectively. USDINR might bounce back towards 95.00-95.55 today.

Dollar Index (99.19) has risen holding above the expected support at 98.80/99. Further rise to 99.50 can be seen in the next few sessions.

EURUSD (1.1632) dipped to 1.1606 yesterday but has bounced back now. A range of 1.1570-1.1680 is likely to hold for the near term.

EURINR (110.6942) could limit its dip to 110.35 and instead rise higher if the USDINR rallies today towards 95.0-95.5.

EURJPY (185.77) has dipped below 186. On the upside there is resistance at 186.50, while on the downside, there is a chance for a dip to 185.

Dollar-Yen (159.70) seems to be holding well above 159.50 and can continue to rise towards 160+ soon.

USDCNY (6.7625) has been slowly falling and with the bears clearly dominant, the spot is headed towards 6.75.

Aussie (0.7158) could dip to 0.71 while below 0.72. On the other hand, Pound (1.3454) is also likely to decline towards 1.34-1.3350 while below 1.35.

USDINR (94.98) has fair chances of bouncing back towards 95-95.50 on news of threats to close the Strait of Hormuz.

The US Treasury Yields have come down again. Failure to sustain the bounce keeps alive the danger of seeing an extended fall breaking below their support. The German Yields have come off from their highs indicating lack of strength. That keeps the door open to test their support first before reversing higher again. The 10Yr GoI is inching up. It has to rise past the immediate resistance to go higher and negate the chances of falling back. Wait and watch.

The US 10Yr (4.45%) and 30Yr (4.97%) Treasury yields have dipped again, failing to sustain the bounce. That keeps alive the danger of breaking the support at 4.45% (10Yr) and 4.95% (30Yr) and see a fall to 4.35% (10Yr) and 4.85% (30Yr). We will have to wait and watch.

The German 10Yr (2.98%) and 30Yr (3.52%) yields have come-off from their highs of 3.02% and 3.56% respectively. That keeps the door open to see 2.9%-2.85% (10Yr) and 3.45% (30Yr) first. Thereafter a sustained reversal is possible targeting 3.1%-3.2% (10Yr) and 3.65%-3.7% (30Yr)

The 10Yr GoI (7.0181%) is inching up. A sustained rise above 7.05% is needed to go higher towards 7.15% again. Only then the chances of the fall to 6.9% will get negated.

Dow and Nikkei have turned lower after recent highs due to renewed Middle East tensions and could see further declines if the situation remains heated. DAX has corrected sharply but needs a sustained break below 25000 to turn bearish, otherwise a bounce towards 25500-26000 remains possible. Nifty continues to weaken in line with expectations and can fall further towards 23,300-23,200. Shanghai also remains under pressure and may decline towards 4025-4000 in the near term.

Dow (50897.70, -0.46%) has turned sharply lower after testing a high of 51384 due to renewed tensions in the Middle East. If tensions remain elevated, a further decline towards 50000-49500 can be seen.

DAX (25,073.10, +0.16%) has fallen back sharply from yesterday’s high of 25336 but needs a sustained break below 25000 to trigger further downside. Otherwise, it can bounce back towards 25500-26000.

Nifty (23,382.60, -0.70%) has declined sharply in line with our expectations. It tested a low of 23,357 before closing, and a further decline towards 23,300-23,200 is expected over the week.

Nikkei (65900.46, +1.13%) tested a high of 67635 yesterday before falling back sharply due to renewed tensions in the Middle East. A further decline towards 65500-65000 can be seen if tensions remain elevated.

Shanghai (4044.68, -0.30%) is declining in line with our alternate expectations. A further fall towards 4025-4000 can be seen in the near term.

Brent and WTI have rebounded sharply on renewed geopolitical tensions and can rise towards $ 100 if the situation remains heated. Gold and Silver may remain within broad ranges of $ 4400-$ 4600 and $ 70-$ 80 respectively. Copper stays positive and needs a break above $ 6.60 to rise further towards $ 6.65-$ 6.70 or higher. Natural Gas has weakened and could test the key $ 3.00 support in the coming sessions.

Brent ($ 94.56) and WTI ($ 91.68) have bounced back sharply, contrary to our expectations, after the Iranian government stated that it had halted the exchange of messages with the US regarding a draft ceasefire agreement due to Israel’s intensified attacks on Lebanon. If tensions remain elevated, a further rise towards $ 100 can be seen in the coming week.

Gold ($ 4504.30) and Silver ($ 75.23) have reverted back. Broad ranges of $ 4400-$ 4600 and $ 70-$ 80 respectively could hold for some time.

Copper ($ 6.55) surged to a high of $ 6.59 yesterday in line with our expectations. A break above $ 6.60 is needed for a continued rise towards $ 6.65-$ 6.70 or higher.

Natural Gas ($ 3.1930) has fallen back, contrary to our expectations, and could test $ 3.00 in the coming sessions.

GMT 9:00 IST 14:30 EU Flash CPI (YoY)
4.1 …Market 3.3 …Previous 3.0

DATA YESTERDAY
==============
GMT 0:30 IST 06:00 JP PMI
…Market 54.5 …Market 55.1 …Actual 54.5

GMT 1:45 IST 07:15 CN PMI
51.6 …Market 51.4 …Previous 52.2 …Actual 51.8

GMT 5:00 IST 10:30 IN Manufacturing PMI
55.0 …Market 54.3 …Previous 54.7 …Actual 55.0

GMT 5:45 IST 11:15 CH GDP
…Market 0.6 …Previous 0.2 …Actual 0.7

GMT 7:30 IST 13:00 CH PMI
…Market 54.0 …Previous 54.5 …Actual 57.3

GMT 8:00 IST 13:30 EU PMI
…Market 51.8 …Previous 51.4 …Actual 51.6

GMT 8:30 IST 14:00 UK PMI
53.5 …Market 53.0 …Previous 53.7 …Actual 53.9

GMT 9:00 IST 14:30 EU Unemp
6.3 …Market 6.2 …Previous 6.3 …Actual 6.3

GMT 12:00 IST 17:30 IN IIP
…Market 3.8 …Previous 4.1

GMT 13:30 IST 19:00 CA PMI
…Previous 53.3

GMT 14:00 IST 19:30 US Manufacturing ISM
52.91 …Market 53.30 …Previous 52.70 …Actual 54