Dollar index rose sharply on higher CPI release but has given up all its gains to fall back sharply to 102, taking the major currencies higher like Euro which can soon fall back below 1.12.The decline came in along with the dip in the US yields and easing of oil prices. USDJPY and EURJPY have dipped but could be short lived. EURINR looks bearish towards 105 while below 107 but USDCNY could trade sideways for sometime while above 6.69. USDINR can attempt to test 94.80/50 with some chances of a sharp bounce back from there in the next few sessions back to 95.50 or higher. Aussie and Pound looks ranged and could be mildly bullish for the next couple of sessions.
Dollar Index (102.092) tested 102.945 after the higher US CPI data release but has fallen sharply thereafter. The dip could be short lived and the Dollar Index can again resume it’s ris soon.
EURUSD (1.1210) continues to trade above 1.12 and while below 1.13, downward pressure for a decline to 1.11 remains.
Dollar-Yen (157.60) has dipped along with the dip in the Dollar index. But it can gain back to rise to 158+ levels over the next few sessions. EURJPY (176.68) has fallen instead of a rise above 178. Now while below 178, a brief decline to 176 or even 175 could be seen before a rebound happens.
EURINR (106.5169) looks bearish towards 105 while it sustains below 107. Near term view is bearish.
USDCNY (6.6918) is holding steady above 6.19 and may consolidate above 6.69 for sometime before declining further below it in the medium term.
Aussie (0.6949) has fallen back from 0.70 and could trade within the 0.69-0.70 range for a few sessions.
Pound (1.3237) too has dipped and can trade within 1.3150-1.33 region for the next few sessions.
USDINR (95.14) closed above 95.14 yesterday despite testing 94.7525. While above 94.70, view is bullish towards 95.50. A slow rise in the pair can be possible in the coming weeks. Any reattempt to decline back below 95 will have a maximum downside of 94.50 doe the near term.
The US Treasury Yields have come down sharply from their highs. The Headline CPI rose 3.72% (YoY) in September, up from 3.35% in August. This triggered a sharp rise in the Treasury Yields initially, but the impact was short-lived. The Treasury Yields can see an extended fall from here (a little lower that what we have expected earlier). But the broader uptrend is intact and is likely to resume after this extended fall. The German Yields can come down in the near-term and then resume their broader uptrend. The 10Yr GoI is moving up in line with our expectation. The bullish view is intact, and the yield can rise more from here.
The US 10Yr (5.13%) and 30Yr (5.48%) yields have come-off sharply from their respective highs 5.33% and 5.63%. Contrary to our expectation, an extended fall to 5%-4.95% (10Yr) and 5.4% (30Yr) looks possible now. Thereafter a fresh rise can them higher to 5.35%-5.4% (10Yr) and 5.7%-5.75% (30Yr.
The German 10Yr (3.46%) and 30Yr (3.82%) Yields remain stable. The downside remains open to see 3.35% (10Yr) and 3.75% (30Yr) first. After this fall, the broader uptrend can resume targeting 3.7% (10Yr) and 4%-4.1% (30Yr).
The 10Yr GoI (7.3999%) has risen back again. Our bullish view remains intact to see 7.5%. Immediate support is at 7.3%
Dow needs to hold the 13-day MA support near 51372 for a rebound towards 52000, else it can fall towards 51000. DAX is flat above 25000 with key support at 25200, below which it can decline towards 25000-24800. Nifty remains weak below 22700 and can fall towards 22400. Nikkei has room to extend the fall towards 64000. Shanghai needs to hold near 3700 for a gradual recovery towards 3800.
Dow (51621.48, -0.09%) has fallen sharply as expected to test the low of 51365 near the 13-day MA before closing higher. The 13-day MA support near 51372 needs to be watched closely. If this holds, then we might see a rebound towards 52000. Else a break below it can open the door for a further decline towards 51000 in the coming session. Watch PPI and Core PPI closely today.
DAX (25298.61, +0.15%) stays flat above 25000 for now. 25200 is acting as a key immediate support. If this breaks, then there is room for a further decline towards 25000-24800 in the coming weeks.
Nifty (22622.70, -0.44%) dipped lower and tested the low of 22558 as expected. Immediate resistance to look at is 22700. While below it, the index looks weak and can fall further towards 22400 over the coming week.
Nikkei (64669.40, -4.53%) has fallen sharply below our estimate of 67000. It has room to extend the fall towards 64000. We need to see if this holds, and if it does, we can expect a recovery from there.
Shanghai (3714.38, -1.30%) opened lower near 3700 as we were expecting a decline towards it earlier. It this level holds, it may gradually recover towards 3800 in the coming weeks.
Brent needs to break above $ 108 to rise towards $ 110-$ 112, while WTI could remain within $ 90-$ 100. Gold needs to hold above $ 4100 to recover towards $ 4300-$ 4400, else it risks falling towards $ 4000-$ 3900. Silver could extend its fall towards $ 52-$ 50. Copper needs to hold above $ 6.55 to rebound, while a break below could drag it towards $ 6.40. Natural Gas could trade within $ 3.00-$ 3.50 for some time.
Brent ($ 104.24) has pulled back from the resistance near $ 108. A break above this level is needed to open the way for a further rise towards $ 110-$ 112. Otherwise, a range of $ 100-$ 108 could prevail for some time.
WTI ($ 93.84) has fallen back. A range of $ 90-$ 100 could hold for some time as long as it sustains below $ 100.
Gold ($ 4159.70) tested a low of $ 4095 yesterday. It has opened higher today and needs to hold above the support near $ 4100 to keep alive the possibility of a rise towards $ 4300-$ 4400. Otherwise, it risks falling further towards $ 4000-$ 3900.
Silver ($ 56.20) has plummeted to a low of $ 55-$ 56, as mentioned yesterday, and the fall could extend further towards $ 52-$ 50.
Copper ($ 6.61) has pulled back, contrary to our expectations. Immediate support is seen near $ 6.55. As long as this level holds, a bounce back is possible. However, a break below this support could drag the price further down towards $ 6.40.
Natural Gas ($ 3.2590) has fallen back and could trade within a range of $ 3.00-$ 3.50 for some time.
1:30 07:00 Australia Labour Force
…Expected 19.6 K …Previous 29.3 K …Actual-39.3 K
6:00 11:30 UK Trade Bal
…Expected -21.8 GBP Bln …Previous -21.0 GBP Bln
9:00 14:30 EU Ind Prodn (MoM)
…Expected 0.1 % …Previous -0.1%
9:30 15:00 IN Trade bal
Expn. -36.7$ bln …Previous -26.9 $ bln –
12:30 18:00 US PPI
Expn 0.3 % …Expected 0.5 % …Previous 0.4 %
12:30 18:00 US PPI ex Food & Energy (MoM)
Expn 0.2 …Expected 0.3 …Previous 0.2
12:30 18:00 US Retail Sales (MoM)
Expn 0.3 % …Expected 0.3 % …Previous 1.2 %
12:30 18:00 US Philifed Index
Expn -99.4 …Expected 26.5 …Previous 37.8
DATA YESTERDAY:-
—————-
CN CPI (YoY)
…Expected 1.0 …Previous0.8 …Actual 0.9
CN PPI
…Expected 4.5 …Previous 3.8 …Actual 5.0
IN WPI
Expn 10.0 % …Expected 10.2 % …Previous 9.9 % …Actual 11.4%
US CPI (MoM)
Expn. 0.33 …Expected 0.6 …Previous 0.4 …Actual 0.65
US Core CPI (MoM)
Expn. 0.13 % …Expected 0.29 % …Previous 0.33 %
