EM ASIA CREDIT: Shriram Finance (SHFLIN): Possible USD issuanace

• RES 4: 1.1919 - High Sep 17 and a key M/T resistance   
• RES 3: 1.1848 High Sep 18 
• RES 2: 1.1813 76.4% retracement of the Sep 17 - Nov 5 bear leg
• RES 1: 1.1804 High Dec 16 and a key short-term resistance 
• PRICE: 1.1729 @ 06:05 GMT Dec 17
• SUP 1: 1.1720/1658 20-day EMA 
• SUP 2: 1.1634 50-day EMA 
• SUP 3: 1.1615 Low Dec 9 
• SUP 4: 1.1591 Low Dec 2

A bull cycle in EURUSD remains intact, however, a short-term reversal signal has appeared on the daily chart. Tuesday’s candle pattern is a shooting star candle formation. If correct, this suggests scope for a pullback near-term and a correction would allow an overbought trend condition to unwind. The first important support lies at 1.1658, the 20-day EMA. Key short-term resistance has been defined at 1.1804, the Dec 16 high.

• RES 4: 129.55 High Nov 26 and key resistance    
• RES 3: 129.24 High Dec 1    
• RES 2: 128.75 High Dec 3 and a key resistance 
• RES 1: 128.08/24 High Dec 8 / 20-day EMA           
• PRICE: 127.55 @ 05:37 GMT Dec 17 
• SUP 1: 127.05 Low Dec 10         
• SUP 2: 127.00 Round number support 
• SUP 3: 126.81 2.764 projection of the Nov 12 - 20 - 26 price swing
• SUP 4: 126.58 3.000 projection of the Nov 12 - 20 - 26 price swing

Bund futures are in consolidation mode. A bear cycle is intact and the contract is trading closer to its recent lows. Scope is seen for an extension towards the 127.00 handle. Key short-term resistance is 128.75, the Dec 3 high. Note that the contract is still oversold. A stronger corrective bounce would allow this oversold condition to unwind. The price pattern on Dec 10 is a doji candle - a short-term reversal signal.

JGB futures have softened post the lunch time break in Japan. We were last 133.18, -.25 versus settlement levels. Session lows rest at 133.14. Note earlier lows in Dec were around 133.11. A clean under 133.00 would see projection levels targeted next (SUP 2: 132.78 - 2.0% Lower Bollinger Band and SUP 2: 132.78 - 2.0% Lower Bollinger Band). 

• Weights on futures have BoJ buying in the 5-10yr tenor as part of its weekly ops (¥846.6bn purchased for this segment, versus ¥491.3bn last week). We also had a lower bid to cover ratio on the 1yr debt auction (3.01, versus 3.706 prior). Lower US Tsy futures (with cash Tsy yields up 1-2.5bps) has also likely been a headwind.
• In the cash JGB space, yields have firmed as the afternoon session progressed. The 10yr up 2bps to 1.98%, at fresh cycle highs. The 1yr is up over 2bps last 0.86%.
• Earlier data was supportive for the Japan outlook, but shouldn't shift BoJ thinking. Export growth is trending higher, while core machine orders surged in Oct, suggesting a positive Q4 capex backdrop.
• Tomorrow on the local calendar we just have weekly offshore investment flows. Then Friday delivers the BoJ outcome. A 25bps hike is widely expected and close to fully priced. See our full preview here.