FOREX – Market Morning Briefing
The Major currencies gained against the Dollar last night even as Equities fell globally. But, most of them are back near levels seen yesterday morning and could cede some more ground to the Dollar. The really big gainer is the Aussie (0.7658) which has moved up from a low of 0.7610, as it seems to be benefitting from strength in Commodities in general. As suggested yesterday, a rise towards 0.7710-45 is possible.
Crucial Support at 100 is holding on Dollar-Yen (100.68) so far and a test of 101.90 may be possible. But there will be a sharp decline in case the Support at 100 breaks. Euro (1.1240) has found Resistance near 1.1280 last night and could dip towards 1.1200-1150.
The Pound (1.2973) is appearing increasingly vulnerable to a fall towards 1.2825-2785, which could accelarate into a deeper decline later. It is already losing against the Euro (EURGBP = 0.8665) and Yen (GBPJPY = 130.66). However, like Dollar-Yen, the Pound-Yen might not break below 129.00 easily.
Asian currencies, especially the Malaysian Ringgitt (4.1246),are relatively weak. On the other hand, the BRIC currencies, in general, remain strong at the moment, but could give back their gains in the coming weeks.
COMMODITIES – Market Morning Briefing
Commodities are generally strong over the last few days.
Brent (47.16) and WTI (45.82) look biddish despite the confusion surrounding the OPEC/ Saudi Arabia talks. Brent can rise towards 48-49 in the near term and the WTI can rise towards 48. But, a sharp decline could take place at the higher levels if the ongoing talks end in acrimony.
Gold (1335) might try to move up towards 1350-60 within its overall sideways range of 1310-60. Whether it gets sold off strongly at 1360 or not is going to be crucial. A rise past 1360, if seen at all, could increase the “risk aversion” in the markets.
Copper (2.1785) is seeing some profit-taking since yesterday, coming down levels just above 2.20. Strong medium term Resistance seen near 2.22-25, as mentioned yesterday.
INTEREST RATES – Market Morning Briefing
Overall yields are weak and look bearish in the near term. There is potential of a rise but that rise is not visible for at least the coming week .
The UK Gilts continue to fall sharply and may continue to extend on the downside in the longer run. This could probably be indicative of a fall in the Pound in the coming sessions.
The US yields are all down but could probably see a short pause before resuming its fall. The yield differentials have risen a bit in the last couple of sessions but may again start to come off next week.
The 30YR JGB yield (0.50%) is holding on to the support well, narrowing down its immediate range to 0.60-0.50% for the near term.
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