Thread by @mosesharding

What’s this week on global & Indian markets?

US equities retain risk-on mode despite most in disbelief (obviously so, when liquidity push not backed by fundamentals pull) while Treasuries gain (risk-balance) appetite and USD undertone shift from risk-off to value-buy mode...1/n

NASDAQ Index lead the equities show leaving Feb’20 high 9838 (and 2019 close 8972) way behind with July high punch at 10824 and S&P500 hold on to top-quartile play of 3130-3393 (building steam for new high), while DJIA in struggle for hold at 27100-29568. Good so far...2/n

Retain view that upside momentum is valid through Q3/2020 & run upto November US Presidential election major event risk. Till then, NASDAQ downside protection is firm above 9850-10000, S&P500 at 3000-3100 (for over 3230) and DJIA at 25000-25350 (pull bias towards 28538)...3/n

US 10Y Treasury yield drift down into 0.50-0.65% is the script against solid medium term support at 0.85-1%; short term outlook is good from balanced appetite between equities & Gilts and not ruling out sub zero FED Fund rate; support zone up at 0.75-0.85% for 0.50-0.575%...4/n

USD Index gives up most intra-2020 rally from 94.65 to 103 and now pushed to prevent breakdown at 94.65/95-95.75. While big picture failure at 100-103.50 is expected, prefer short term consolidation at 95-98.50, stop for big picture view of 95/96.50-102/103.50 at 94.50...5/n

EUR/USD up at big picture 1.05/1.0650-1.1350/1.15 with completion of back & forth move and into neutral bias between 1.15-1.1850 and 1.10-1.1350, while USD/JPY is boxed at 105/106.50-108.50/110, post March 2020 collapse from >110-111.50 supply zone to 100-101.50 BOJ support...6/n

Gold (XAU/USD spot) into mark time mode at $1785-1815 (post 2020 high punch at $1818; above $1750-1785, undertone is between risk-neutral to on inching towards 1850-1925/2000 and not sure of buy for hold appetite here, while #Brent Crude retain risk-on mode at $40-42.50...7/n

Indian context is good when in last mile rally post March collapse with support from external tailwinds while retaining hope on “something big” from @FinMinIndia when @RBI is done with most ammunition, except 25-35 bps final rate cut & continuity with liquidity support....8/n

Can (final) rate cut and abundant liquidity at lower rate to AAA/AA borrowers and credit flow to others under 20-100% underwriting support take #Nifty beyond last mile 10650-11350 for end of rally from 7511-8955? It would sure get nervous >11000 for buy/hold/accumulate...9/n

#banknifty lift of support from 19500-19650 to 20850-21000 is good, but can it stay resilient at/above 21000-21350 for recovery into 22650-23150/23500 supported by NIFTY momentum? Given that appetite for banks is on the wane when woes get bigger on earnings, need caution...10/n

India 10Y bond 5.79% 2030 focus is squeezed at 5.75-5.85% from previous 5.75-5.95% and short term breakout bias neutral between 5.65-5.75 and 5.85-5.95%; @RBI would be happy to keep the play on at 5.65-5.90% at 2.50-2.65% spread even if R/R cut to 3-3.10%...11/n

USD/INR push back from 76.65-77 held at 74.50-74.85 b4 into mark time mode at upper half of 74.50-75.50; it’s crucial when at lower end of big picture 73.50/75-78.50/80 from robust pipeline $ supply and lower demand from Current Account assigning that surplus is one-off...12/n

As always, @RBI holds the trigger on USD/INR to either allow for consolidation at 73.50-75 or get focus back into 75.50-77; in any case, it’s fine when value retained at lower half of big picture outlook at 73.50-80; it’s prudent to accumulate $ reserves when in sunny days...13/n

Immediate items to look for from @RBI (a) resolution on C-19 moratorium book & support on pre C-19 NPAs turning from bad to worse (b) indication on extent of build-up on $ & ₹ assets on B/S (c) rate cut when CPI is elevated >tolerance 4-6% (d) reconciliation of weak banks...14/n

While reconstruction solutions for weaker banks (that are stuck with capital & NPA linked profitability woes) is tough for @RBI , need to see actions from @FinMinIndia on capital infusion, NPA relief, credit flow support to A rated & below borrowers and lot more...15/n

All taken, opportunities are plenty for India post developed nations urge for China exit, but yet to get comfort on bandwidth to convert these results!

Can India make it this time when Cabinet can do anything that’s needed to make it happen?

Hoping for the best....16/16