USD surged on a hawkish hold by the Fed; Wall Street flat

·         Gold and oil slid further on progress of Gaza war permanent ceasefire amid G7 meeting; Fed may launch 11 rate cut cycles from Dec’24 after US election

On Wednesday apart from the US inflation report, all focus of the market was on the Fed’s policy decision, where the Fed was expected to hold the rate with fresh dot-plots, projecting at least -50 bps rate cuts in H2CY24, if not -75 bps, which was previously estimated in March’24 dot-plots; i.e. the market was largely expecting less hawkish hold by Fed. But the Fed goes for a hawkish hold as it projected a -25 bps rate cut in 2024 against earlier March dot plots of -75 bps, but also projected higher rate cuts by -100 bps each in 2025 and 2026 (against earlier -75 bps) and kept 2027 projected rate cut of -50 bps unchanged; i.e. Fed has shifted the -50 bps rate cuts deficit for 2024 to 2025 and 2026 evenly. Thus the overall stance of the Fed may be termed as less hawkish than originally seemed/expected.

On Wednesday, Wall Street, Gold stumbled from a softer-than-expected US CORE CPI high after the Fed’s hawkish hold, but the overall impact was quite limited as the Fed shifted 50 bps rate cuts deficit for 2024 to 2025-26 equally. Now Fed will start the rate cuts cycle from Dec’24, just after the Nov’24 US election to keep both Democrats and Republicans happy and continue -25 bps rate cuts for the next eight quarters each in 2025-26 @-25 bps and then close the rate cut cycle after cutting -25 bps twice in June and Dec’27 (H1/H2) for a terminal rate +2.75% against pre-COVID terminal rate +2.50%.

The market was expecting at least a -50 bps Fed rate cut in 2024 (Nov+Dec’24) before Fed and May inflation data; but after softer than expected May core inflation data, the Market also gave a higher probability of a Sep’24 rate cut; i.e. ahead of the Fed, the market was discounting almost -75 bps (three) rate cuts ahead of Fed, while Fed projected only one -25 bps rate cut in rest of 2024, most probably in Dec’24 just after the election, but at the same time, Fed may ‘almost confirm’ Dec’24 rate cut intention in Sep’24 meeting-just ahead of Nov’24 election, so that Wall Street will be in a good mood/shape ahead of the election and Biden admin will feel happy. Experienced Fed Chair Powell will act in a balancing way to keep both sides (Biden/Democrats-Trump/Republicans) happy before/after the election.

Overall, the 6M rolling average of US CPI is now around +3.3% against +4.1% in 2023 and still substantially above the Fed’s target of +2.0%; officially US Congress has given Fed price stability mandate as 2% CPI on a sustainable basis; not core CPI or core PCE and even total PCE inflation. However, the Fed usually takes the average of core PCE and core CPI inflation for any policy stance as core inflation generally gives a fair picture of underlying inflation. Although the 6M rolling average of headline unemployment number was around 3.8% in May, it’s below the Fed’s 4.2% red line (but higher than the 2023 average of 3.6%) and if we consider the increasing number of multiple job holders, it was almost equivalent to the decrease in the headline number of employed persons.

Thus overall US NFP/BLS job report and also inflation for 2024 are gradually cooling, it’s still hot enough and the Fed may not be in a hurry to cut rates just ahead of the Nov’24 US Presidential election (unlike the ECB and BOC, which cut rates ahead of the election after some softening in inflation).

Also, overall inflation, especially prices of daily essential goods & services is now still higher by at least +20% from pre-COVID/pre-Biden admin; i.e. cost of living is now still quite elevated, and low-income Americans, the main vote bank for any political party are not happy with Biden admin and thus there is some anti-incumbent wave along with the issues of excessive immigration/migrant labors (foreign workers), causing loss to native Americans in lower/minimum wage workplaces. Hotter inflation may be one of the primary reasons behind unexpected defeat/bad results in elections for many incumbent ruling parties in many democracies.

As the US labor market; i.e. overall unemployment rate is still hovering around 3.8% average pre-COVID levels, but inflation/cost of living is substantially above 20% instead normal 8-10%, Biden/Powell may not take any undue risk of slowing down disinflation pace by cutting rates just two months ahead of Nov’24 election and signaling the same around 6-months ago to prepare the market for the same. Fed will never take any real rate action without preparing the market well in advance. If there was no election this year, the Fed might prepare the market in the March meeting and subsequent jawboning for the start of the rate cut cycle from June itself and continue the same every quarter end at least till 2026 for the terminal repo rate target of +2.75% by Dec’26 instead Dec’27.

On Wednesday, the U.S. Fed held all primary policy rates for a 7th consecutive meeting (since June 24) as unanimously expected; i.e. the target range for the Federal Fund's Rate (FFR-interbank rate) at +5.38% (median of 5.25%-5.50%); primary credit rate (repo rate) at +5.50%; IOER (reverse repo rate) at +5.40%; overnight repurchase agreement rate (RP) at +5.50% and RRP (Overnight Reverse Repurchase Agreement Rate) at +5.30%, keeping U.S. borrowing costs to the highest level since January 2001 (23-years). Fed is still in wait-and-watch mode and not confident enough that the present disinflation process will lead to a 2% inflation target within a reasonable period (mid-term).

In June most of the FOMC Policymakers did not expect it would be appropriate to reduce rates until they gained ‘higher confidence’ that inflation is moving sustainably toward 2%. Meanwhile, the latest June dot plot shows policymakers see only one rate cut this year and four rate cuts each in 2025 and 2026. Back in March, the Fed was seeing three cuts in 2024 and three in 2025-26 each. The 2027 projections of two rate cuts remain unchanged in both March and June dot-plots.

 

In March SEP, The Fed made no revisions to real GDP growth projections and still sees the economy expanding +2.1% in 2024, +2.0% in 2025 and 2026. Meanwhile, total PCE inflation was revised higher for 2024 (2.6% vs 2.4% in the March projection) and next year (2.3% vs 2.2%) but was kept at 2% for 2026. Core PCE inflation was also revised up to 2.8% in 2024 (vs 2.6%) and 2025 (2.3% vs 2.2%) but was kept at 2% for 2026. The unemployment rate is projected at 4% for Dec’2024, the same as expected in March, but is seen slightly higher at 4.2% in Dec’2025 (vs 4.1%).

The US core CPI inflation is still quite elevated at around +3.7% on average (6M rolling), while the unemployment rate around 3.8% (6M Rolling average) is hovering just below the Fed’s longer-term sustainable target of 4.2%. Thus theoretically, there is still space for wait & watch and a need for a higher (restrictive) longer policy stance, which may further produce additional slack; i.e. restrict economic activities and overall demand, helping to match with the present constrained supply side of the economy and bring down inflation further in the process towards +2.0% targets on a sustainable basis. Fed believes that the rate of disinflation accelerated in H2CY23 due to supply-side easing including the labor market, which may not be repeated in 2024 due to various issues.

If we compare the average Fed repo rate and core CPI, the real repo rate was -3.98% even in 2021; then goes to real positive levels around +0.23% in 2023 and now running around +1.80% in 2024 (till May-June). Fed’s preferred rate of real positive (restrictive) rate range may be now around 1.00-2.00% and longer-term neutral rate around 0.75-.100%. Fed intends to keep the terminal repo rate at +2.75% by Dec’27 against the core inflation target of around +2.0%. Fed may keep present real rate around +1.80% or around 2.00-1.50% till Sep’24 and then may gradually cut rates by -25 bps in each quarter for the next nine quarters consecutively and gradually reduce real/restrictive rate to around 1.25-1.00% by Dec’26 and then +0.75% by Dec’27 after cutting 25 bps twice in H1 and H2.

In its June dot-plots/SEP, the Fed projected a -25 bps rate cut each in 2024, a -75 bps rate cut each in 2025, and 2026 and a -50 bps rate cut in 2027 (longer term) for indicative repo rate to 5.25% by Dec’24, 4.25% by Dec’25, 3.25% by Dec’26 and 2.75% by Dec’27 (terminal rate) from present 5.50%. Similarly, in its June’24 SEP, the Fed projected US real GDP growth for 2024 at 2.1%; 2.0% for 2025, and 2.0% for 2026. Fed projected the core PCE inflation for 2024 at 2.8%; for 2025 at 2.3% and +2.0% by Dec’26. The unemployment rate is seen at 4% for 2024; for 2025 at 4.2% and +4.1% by Dec’26. Fed/Chair Powell always maintains that although shorter-term (6-12M) SEP/dot-plots may be relevant or most likely to happen; longer-term SEPs are not and are always subject to some revision as per actual economic data and outlook thereof.

Full text of Fed’s statement: 12th June- Federal Reserve issues FOMC statement

“Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have remained strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated. In recent months, there has been modest further progress toward the Committee's 2 percent inflation objective.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent. In addition, the Committee will continue reducing its holdings of Treasury securities agency debt and agency mortgage‑backed securities. The Committee is strongly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary C. Daly; Philip N. Jefferson; Adriana D. Kugler; Loretta J. Mester; and Christopher J. Waller.”

Implementation Note issued 12th June’24: Decisions Regarding Monetary Policy Implementation

“The Federal Reserve has made the following decisions to implement the monetary policy stance announced by the Federal Open Market Committee in its statement on June 12, 2024:

·         The Board of Governors of the Federal Reserve System voted unanimously to maintain the interest rate paid on reserve balances at 5.4 percent, effective June 13, 2024.

 As part of its policy decision, the Federal Open Market Committee voted to direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account in accordance with the following domestic policy directive: "Effective June 13, 2024, the Federal Open Market Committee directs the Desk to:

·         Undertake open market operations as necessary to maintain the federal funds rate in a target range of 5-1/4 to 5-1/2 percent.

·         Conduct standing overnight repurchase agreement operations with a minimum bid rate of 5.5 percent and with an aggregate operation limit of $500 billion.

·         Conduct standing overnight reverse repurchase agreement operations at an offering rate of 5.3 percent and with a per-counterparty limit of $160 billion per day.

·         Roll over at auction the amount of principal payments from the Federal Reserve's holdings of Treasury securities maturing in each calendar month that exceeds a cap of $25 billion per month. Redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap

·         Reinvest the amount of principal payments from the Federal Reserve's holdings of agency debt and agency mortgage-backed securities (MBS) received in each calendar month that exceeds a cap of $35 billion per month into Treasury securities to roughly match the maturity composition of Treasury securities outstanding

·          Allow modest deviations from stated amounts for reinvestments, if needed for operational reasons

·          Engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve's agency MBS transactions

·         In a related action, the Board of Governors of the Federal Reserve System voted unanimously to approve the establishment of the primary credit rate at the existing level of 5.5 percent

Full text of Fed Chair Powell’s opening statement: 12th June’24

My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people. Our economy has made considerable progress toward both goals over the past two years. The labor market has come into better balance, with continued strong job gains and a low unemployment rate. Inflation has eased substantially from a peak of 7 percent to 2.7 percent but is still too high. We are strongly committed to returning inflation to our 2 percent goal in support of a strong economy that benefits everyone.

Today, the FOMC decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings. We are maintaining our restrictive stance on monetary policy to keep demand in line with supply and reduce inflationary pressures. I will have more to say about monetary policy after briefly reviewing economic developments.

Recent indicators suggest that economic activity has continued to expand at a solid pace. Although GDP growth moderated from 3.4 percent in the fourth quarter of last year to 1.3 percent in the first quarter, private domestic final purchases, which exclude inventory investment, government spending, and net exports and usually send a clearer signal on underlying demand, grew at 2.8 percent in the first quarter, nearly as strong as the second half of 2023. Growth of consumer spending has slowed from last year’s robust pace but remains solid. And investment in equipment and intangibles has picked up from its anemic pace last year.

Improving supply conditions have supported resilient demand and the strong performance of the U.S. economy over the past year. In our Summary of Economic Projections, Committee participants generally expect GDP growth to slow from last year’s pace, with a median projection of 2.1 percent this year and 2.0 percent over the next two years.

In the labor market, supply and demand conditions have come into better balance. Payroll job gains averaged 218 thousand jobs per month in April and May, a pace that is still strong but a bit below that seen in the first quarter. The unemployment rate ticked up but remains low at 4 percent. Strong job creation over the past couple of years has been accompanied by an increase in the supply of workers, reflecting increases in participation among individuals aged 25 to 54 years and a continued strong pace of immigration.

Nominal wage growth has eased over the past year and the jobs-to-workers gap has narrowed. Overall, a broad set of indicators suggests that conditions in the labor market have returned to about where they stood on the eve of the pandemic—relatively tight but not overheated. FOMC participants expect labor market strength to continue. The median unemployment rate projection in the SEP is 4.0 percent at the end of this year and 4.2 percent at the end of next year.

Inflation has eased notably over the past two years but remains above our longer-run goal of 2 percent. Total PCE prices rose 2.7 percent over the 12 months ending in April; excluding the volatile food and energy categories, core PCE prices rose 2.8 percent. The Consumer Price Index, which came out this morning and tends to run higher than the PCE price index, rose 3.3 percent over the 12 months ending in May, and the core CPI rose 3.4 percent. The inflation data received earlier this year were higher than expected, though more recent monthly readings have eased somewhat.

Longer-term inflation expectations appear to remain well anchored, as reflected in a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets. The median projection in the SEP for total PCE inflation is 2.6 percent this year, 2.3 percent next year, and 2.0 percent in 2026.

My colleagues and I are acutely aware that high inflation imposes significant hardship as it erodes purchasing power, especially for those least able to meet the higher costs of essentials like food, housing, and transportation. Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people. In support of these goals, the Committee decided at today’s meeting to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent and to continue reducing our securities holdings.

As labor market tightness has eased and inflation has declined over the past year, the risks to achieving our employment and inflation goals have moved toward better balance. The economic outlook is uncertain, however, and we remain highly attentive to inflation risks.

We have stated that we do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2 percent. So far this year, the data have not given us that greater confidence. The most recent inflation readings have been more favorable than earlier in the year, however, and there has been modest further progress toward our inflation objective. We will need to see more good data to bolster our confidence that inflation is moving sustainably toward 2 percent.

We know that reducing policy restraint too soon or too much could result in a reversal of the progress we have seen on inflation. At the same time, reducing policy restraint too late or too little could unduly weaken economic activity and employment. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.

In our SEP, FOMC participants wrote down their individual assessments of an appropriate path for the federal funds rate, based on what each participant judged to be the most likely scenario going forward. If the economy evolves as expected, then the median participant projects that the appropriate level of the federal funds rate will be 5.1 percent at the end of this year, 4.1 percent at the end of 2025, and 3.1 percent at the end of 2026.

But these projections are not a Committee plan or any kind of decision. As the economy evolves, assessments of the appropriate policy path will adjust to best promote our maximum employment and price stability goals. If the economy remains solid and inflation persists, we are prepared to maintain the current target range for the federal funds rate as long as appropriate. If the labor market was to weaken unexpectedly or inflation was to fall more quickly than anticipated, we are prepared to respond. The policy is well-positioned to deal with the risks and uncertainties that we face in pursuing both sides of our dual mandate. We will continue to make our decisions meeting by meeting, based on the totality of the data and its implications for the outlook and the balance of risks.

The Fed has been assigned two goals for monetary policy—maximum employment and stable prices. We remain committed to bringing inflation back down to our 2 percent goal and to keeping longer-term inflation expectations well anchored. Restoring price stability is essential to achieving maximum employment and stable prices over the long run. Our success in delivering on these goals matters to all Americans. We understand that our actions affect communities, families, and businesses across the country. Everything we do is in service to our public mission. We at the Fed will do everything we can to achieve our maximum employment and price stability goals.

Thank you. I look forward to your questions.”

Highlights of Fed and Chair Powell’s statements/comments in the Q&A: 12th June’24

·         Fed projections imply 25 bps of rate cuts in 2024 from the current level, median view of the Fed funds rate at the end-2024 of 5.1% (prev. 4.6%)

·         The US Interest rate is unchanged as expected. SEP outlines fewer rate cuts this year than previously expected, with an upward revision to inflation

·         If jobs are to weaken unexpectedly, the Fed is ready to respond

·         We are practicing a slight element of conservatism on our inflation outlook

·         If the economy remains solid and inflation persists, we're prepared to maintain the rate where it is as long as appropriate. The opposite is also true in terms of rate cuts

·         The Summary of Economic Projections is not a plan or any kind of decision

·         We will need to see more good data to bolster confidence in inflation

·         So far this year we have not gotten greater confidence in inflation to cut

·         Risks to achieving the dual mandate are in better balance

·         Recent monthly inflation readings have eased somewhat

·         We expect labor market strength to continue

·         The labor market is coming into a better balance

·         The Fed generally expects GDP to slow from last year's pace

·         Consumer spending remains solid

·         Our economy has made considerable progress. Continued strong job gains in the economy

·         We don't have high confidence in forecasts

·         We have a fairly conservative forecast on inflation, if we get better readings, I think we will see the forecast come down

·         The test for cutting rates is more confidence that inflation is moving toward 2%

·         I'd look at all of the Fed forecasts for the rate path as plausible

·         Policymakers are not trying to send a strong signal with forecasts

·         Unexpected weakness in the labor market could also call for a response

·         FOMC participants were allowed to update their SEPs to incorporate the CPI data today if they wanted to, most policymakers don't update their forecasts, though

·         People are coming to the view that rates are less likely to go down to pre-pandemic levels

·         Today was a better inflation report than almost anyone expected, we have to see what today's data means for the balance of risk

·         It's no longer the super-heated labor market of a few years ago

·         There's an argument that job gains may be a bit overstated, but they're still strong. Unemployment moved up a bit, that's an important statistic

·         We are seeing what we wanted to see in the economy right now, we are getting good results here

·         We think our policy stance is about right

·         Policy is restrictive. The question of whether it's restrictive enough will be answered over time

·         There's been a surprising increase in import prices of goods

·         Inflationary pressures have come down, but still getting elevated inflation in non-housing services

·         Regardless of the dots, everyone at FOMC would say they're 'very data dependent'

·         A decision to loosen policy could have several reasons

·         if we see the unemployment more than we forecast, we would view that as an unexpected weakening, of course, we can't wait for that to happen, and that's why we always look at the balance of risks

·         Credit card balances & defaults are not at high levels

·         It is not our plan to wait for things to break and then try to fix them

·         We have the ability right now to approach rate-cut questions carefully

·         We are seeing what we wanted to see in the economy right now, we are getting good results here

Market reaction after Fed:

·         Fed swaps continued to fully price in quarter-point interest rate cuts in November and December

The Fed changed the language in its statement, noting "modest further progress towards the committee's 2% inflation objective." Previously, the statement indicated a "lack" of additional progress.

On Thursday, the US Treasury Secretary Yellen said:

·         The labour market now resembles conditions before the pandemic

·         We are creating jobs at a very rapid pace

·         If the debt is stabilized relative to the size of the economy, then we're in a reasonable place

·         A significant share of remaining inflation represents housing costs returning to normal slowly

·         The labor market doesn't look like a threat to inflation, & wages are not a threat to contribute to inflation

·         The labor market is now resembling pre-pandemic

·         The unemployment rate has drifted up a little bit, and the labor market has become a little less hot & a little more normal

·         Our view is that it is legal to seize Russian assets but we are looking to keep allies together to do something jointly

Market impact:

On Wednesday, Wall Street, Gold stumbled from a softer-than-expected US CORE CPI high after the Fed’s hawkish hold, but the overall impact was quite limited as the Fed shifted 50 bps rate cuts deficit for 2024 to 2025-26. Now Fed will start the rate cuts cycle from Dec’24, just after the Nov’24 US election to keep both Democrats and Republicans happy and continue -25 bps rate cuts for the next eight quarters each in 2025-26 @-25 bps and then close the rate cut cycle after cutting -25 bps twice in June and Dec’27 (H1/H2) for a terminal rate +2.75% against pre-COVID terminal rate +2.50%. The market was expecting at least -50 bps Fed rate cut in 2024 (Nov+Dec’24) before Fed and May inflation data; but after softer inflation data, the Market also gave a higher probability of Sep’24 rate cut; i.e. ahead of the Fed, the market was discounting almost -75 bps (three) rate cuts.

On Thursday, Wall Street Futures and Gold got some boost after softer than expected US PPI report but soon stumbled. In any way, Wall Street Futures were also buoyed by upbeat auctions OF US 30Y bonds. At EOD, Wall Street closed almost flat, while the European market tumbled on growing political/election uncertainty. Gold tumbled below $2300 and may be heading towards the $2260 zone after it becomes almost clear that the Fed may not cut before the Nov’24 US election and China is slowing down its FX/USD assets diversification to Gold after repeated visits by Yellen to PBOC over the last few months.

On Thursday, Wall Street was boosted by techs, real estate, utilities, and consumer staples, while dragged by communication services, energy, industrials, consumer discretionary, banks & financials, healthcare, and materials to some extent. Script-wise, Wall Street was boosted by JPM, Home Depot, United Health, P&G, Walmart, Apple, Nike, 3M, Visa, Microsoft, and IBM to some extent, while dragged by Salesforce, Amazon, Boeing, Intel, Chevron, Amgen, American Express, Caterpillar and Walt Disney.

On the corporate front, Broadcom soared afte upbeat guidance raising revenue forecasts for AI chips and announcing a stock split, while Nvidia surged. Tesla jumped after shareholders approved Elon Musk's $56 billion pay package and announced plans to relocate to Texas; Tesla also increased its EV price for EU/Europe produced from China amid higher EV tariffs imposed on Chinese production; the US also imposed higher EV tariffs on China. Boeing slid on some quality control issues in undelivered 787 jets. Wall Street was also buoyed as Trump proposed the continuation of China tariffs along with a 2017 tax cut extension beyond 2025.

Weekly-Technical trading levels: DJ-30, NQ-100, and Gold

Whatever may be the narrative, technically Dow Future (38700) has to sustain over 39100 for any recovery to 39200//39300*-39400*/39700 and 39800/40200-40350*/40500 and may further rally to 40600-40700/41000 and even 42000-42700 in the coming days; otherwise, sustaining below 39000-38900 may further fall to 38750/38550-38450/38250 and 38100/37900*-37600/37400 in the coming days.

Similarly, NQ-100 Future (19000) has to sustain over 19200 for a further rally to 19300-19450/19775 and 20000/20200 in the coming days; otherwise, sustaining below 19100-19000/18800 may again fall to 18700-18400/18100-18000/17700 and 17600/17500-17300/17150 in the coming days.

Also, technically Gold (XAU/USD: 2290) has to sustain over 2285-2275 for any recovery to 2310/2320 -2330/2355/2365*-2375/2385 and further rally to 2400/2425-2435/2455* and 2475-2500; otherwise sustaining below 2270-2265 may further fall to 2245/2230-2220/2180 and 2155/2115-2085/2045 in the coming