The Dollar Index rose well after the higher-than-expected CPI release (4.08% YY for Oct-26 versus 3.72% for Sep-26). It remains bullish above 101, with scope for a rise towards 103-104, while only a break below 101 (less likely) could extend the downside to 100. EURUSD can continue to trade within 1.11-1.1250 while Dollar-Yen needs a breakout above 159 for a rise to 160 and beyond, else the 159-157 range can stay intact. EURJPY looks bullish towards 178-179. EURINR has scope to rise towards 105.50-106 while holding above 104.50, and USDCNY may rise slowly towards 6.68/69 with downside limited to 6.6650. The Aussie needs a breakout above 0.69 to turn bullish, while the Pound may keep fluctuating within 1.35-1.33 until a breakout gives clearer direction. USDINR has tested 93.69 so far and, with crude prices still trading lower, has scope to test 93.50.
Dollar Index (102.26) rose well yesterday. The CPI YY% release came in higher at 4.08% for Oct-26, from 3.72% seen for Sep-26. While above 101, there is scope for a rise towards 103-104 eventually on the upside. Only a break below 101 (looks less likely), if seen can extend the downside to 100 before an expected rebound is seen.
EURUSD (1.1167) continues to trade within the broad 1.11-1.1250 region which can continue to hold for the near term.
Dollar-Yen (158.90) has risen along with the rise in the Dollar Index. As the spot nears 159, a breakout on the upside is necessary (more likely) for an eventual rise to 160 and beyond, else a rejection can keep the broad range of 159-157 intact for the near term. On the other hand, EURJPY (177.44) is looking bullish for a rise towards 178-179 soon.
EURINR (104.9121) can have scope to rise towards 105.50-106 while it hold above 104.50 in the next few sessions.
USDCNY (6.6748) seems to be slowly rising towards 6.68/69 with immediate downside likely to be limited to 6.6650.
Aussie (0.6884) has recovered slightly from yesterday’s low of 0.6843 and needs a breakout above 0.69 again to turn bullish for the near term. Else while below 0.69, view is bearish.
Pound (1.3354) has been highly fluctuating in the 1.35-1.33 region which may continue for the next couple of sessions unless a breakout on either side is seen which could give more directional clarity.
USDINR (93.9180) tested 93.69 so far and with the crude prices still trading lower, there is scope for USDINR to test 93.50.
The US Treasury Yields have risen back sharply after the inflation data release yesterday. The US Headline CPI rose 4.08% (YoY) in October compared to 3.72% in September. The support on the Yields has held very well. The strong bounce keeps our broader bullish view intact. A follow-through rise can take them further higher. The German Yields have also risen back from near their support as expected. We can expect them to go further higher. The 10Yr GoI seems to be turning down, failing to rise past the resistance. That keeps the downside open to fall more.
The US 10Yr (4.99%) and 30Yr (5.35%) Yields are rising back towards 5% (10Yr) and 5.4% (30Yr) much faster than expected. A strong follow-through rise above 5% (10Yr) and 5.4% (30Yr) will clear the way for 5.15%-5.2% (10Yr) and 5.4% (30Yr).
The German 10Yr (3.32%) and 30Yr (3.66%) Yields have bounced back well. That keeps intact our bullish view of seeing a fresh rise to 3.7% (10Yr) and 4%-4.1% (30Yr). Support at 3.2% (10Yr) and 3.6% (30Yr) has held very well.
The 10Yr GoI (7.1529%) seems to be turning down again. That keeps the downside open to see 7.1%-7%. Need to see what happens after that.
Global equities have stabilised after the recent AI selloff, with the Dow and DAX back above 52,000 and 26,000 and upside towards 52,800 and 27,000 while they hold. Nifty is holding well above 25,000 and can rise towards 25,800-26,000. Nikkei is gradually rising but needs a sustained move above 62,000 to negate the decline towards 52,000-50,000. Shanghai is holding above 3,600 and can extend the rise towards 3,750.
Dow (52231.89, -0.30%) has managed to rise above 52000 contrary to our earlier view, supported by lower oil prices and improved risk sentiment after the recent AI selloff. While it holds above 52000, further rise towards 52800 looks possible in the near term. Else a break below 52000 will pull the index back towards 51500.
DAX (26347.45, +0.30%) has risen back above 26000 contrary to our earlier view, aided by softer oil and stronger European earnings. It has tested the high of 26633 so far. It needs to hold above 26000 to rise higher towards 27000 in the coming weeks.
Nifty (25044.65, +0.23%) is holding well above 25000 as expected and keeps the possibility of a rise towards 25800-26000 open in the coming weeks.
Nikkei (60750.72, +0.47%) is gradually rising but still needs a sustained move above 62000 to negate the expected decline towards 52000-50000 over the week.
Shanghai (3633.72, +0.08%) has tested the high of 3701 so far in line with our view. It is holding well above 3600 and has scope to extend the rise towards 3750 in the coming session while it holds this level.
Crude oil prices fell sharply on Middle East peace hopes. Brent and WTI face further downside toward 90–85 and 85–80, respectively. Gold pulled back to test critical support at 4000, while Silver turned lower with key support at 50. Meanwhile, Copper maintains a bullish bias toward 6.45–6.50 while holding above 6.2, and Natural Gas broke key resistance to target 3.5 on colder forecasts.
Brent ($ 92.30) and WTI ($ 86.52) have fallen sharply as growing optimism over a resolution to the US-Iran conflict and a full resumption of Middle Eastern energy supplies continues to weigh on prices. Prices could decline further towards 90–85 for Brent and 85–80 for WTI in the near term.
Gold ($ 4050.20) has pulled back sharply, and it remains to be seen whether it holds above 4000 to trigger a bounce or breaks lower towards 3900–3850.
Silver ($ 52.34) has fallen back contrary to our expectations and could decline further towards 50. A break below this support level would drag prices lower towards 48–45, which requires close monitoring.
Copper ($ 6.31) bounced above 6.3 as support held firmly in line with our previous analysis. As long as support near 6.2 holds, a further rise towards 6.45–6.50 remains likely.
Natural Gas ($ 3.3060) has surged past 3.20 contrary to our expectations, driven by colder weather forecasts. A further rise towards 3.5 could be seen in the upcoming sessions.
No major data release today.
DATA YESTERDAY:-
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US CPI (MoM)
Expn. 0.3 …Expected 0.3 …Previous0.6 …Actual0.4
US Core CPI (MoM)
Expn. 0.17 % …Expected 0.2 % …Previous 0.33 %…Actual 0.30%
