Thread by @mosesharding

What’s this week in Global markets when growth in tumbling mode?

Growth contraction in H1/2020 is to expectation despite being severe, but recoup momentum is not yet visible when worst of C-19 is not yet behind, while hope remains on launch of vaccines before end of 2020...1/N

FED & other G7 Central Banks continue to support equities to prevent collapse & set up of pessimism on the real economy! Positive take-away for EMs & rest of the world is from combination of easing US Treasury yields and weak USD, not withstanding firm Gold and Brent Crude...2/N

NASDAQ lead US equities with play above 10350 (keeping base 10000 away) but lack steam to punch new high over 10839, and good for consolidation at 10350-10850 retaining positive undertone while S&P500 hold sideways play at 3130-3390 & managing hold above midpoint 3260...3/N

DJIA index is the laggard with close below 26479 and struggling for sustainability above 27100 keeping 2020 high 29568 off radar with short term outlook good at 25350/26000-27000/27650.

All combined, undertone retained between risk-light & neutral (avoiding extremes)...4/N

US Q2020 GDP compression and hope of FED moving Fund rate from positive to negative side of 0% pushed 10Y yield into lower end of 0.50-0.65% and of big picture 0.50/0.575-0.925/1.0% pushing need for review at 0.35/0.425-0.675/0.75%; it’s consolidation phase around 0.50%...5/N

USD Index DXY into sideways mode at 92.50-93.50 post breakdown at 94.65-95, big picture resist zone pushed down from 102-103.50 to 95-96.50 with pull bias into 88.50-90; for now, good to have zoom-in focus at 91.50-94.50, and don’t see downside risk beyond 88.50-90...6/N

EUR/USD failed at higher end of 1.1650–1.20 (at 1.1910, pulling long-unwind urge for end of chase from 1.05-1.0850) and good at 1.15/1.1650-1.20/1.2150.

USD/JPY recovery from midpoint of 103.50–105 is fine from short-squeeze of 110-111.50 and good at 102/103.50-106.50/108...7/N

Between June-July, Gold lift from $1650-1685 to $1965-2000 is big and look good beyond high $1983 for consolidation at $19151950-2000/2035 retaining positive undertone from weak USD, easing US yields and contraction in growth, but be watchful of turnaround signals...8/N

Indian context is high dependent on domestic event risks - 6th August @RBI policy review (non-event or something big-bang) and decision on status of C-19 moratorium loan book (extension or restructuring or both); fear remain for avoidance of despair when nothing gr8 4 cheer...9/N

#Nifty close at lower end of 11000–11350 (11341-11026-11073) is to expectation and into trend down mode on run upto @RBI policy; undertone is set for shift into 10350/10650-11000 (trail stop 11185) for lower end hold and big picture consolidation at 10350-11350; no worry...10/N

It’s straight forward & no brain’er case to see #banknifty down at lower end of 21350/21650-23150/23500 (23211-21375-21640); retain pull bias towards 19500 & resist zone down to 22000-22350 from previous week 22650-23000; need positive dosage to keep 16000-17500 off radar...11/N

10Y bond 5.79% 2030 held back & forth at 5.825-5.875% failing to sustain either way overshoot while the new benchmark came in at 5.77% coupon; It’s kind of “neither here, nor there” kind of dynamics boxed between comfort of elevated carry and fear of excessive supplies...12/N

Don’t see need for review of outlook when @RBI support exist over 5.90% and investors portfolio-light & duration-cut urge below 5.75%; so, good to stay focused at 5.75-5.90% (5.79% bond at 5.825-5.90% and 5.77% bond at 5.75-5.825%) and sun-set for 6.45% 2029 at 5.95-6%...13/N

USD/INR got locked at 74.65-75, @RBI and short-squeeze on the bid and most stakeholders on the offer despite volatile & weak USD; Will breakdown at 74.50-74.65 be allowed for extended ₹ recovery from 76.65-77 to 73.50-73.85? Yes, trail stop on break at 75.15-75.50!....14/N

All combined, it’s good to stay positioned between risk-light to neutral and good to be on sell-on-recovery mode into @RBI policy review! Combination of growth contraction and banking sector woes is scary when already in fatigue mode & weak to deliver rescue acts! 😞...15/15