Most Asian markets slid after the U.S. Federal Reserve could start scaling back its huge economic stimulus program later this year. The announcement drew sharp reaction in financial markets, showing just how dependent investors have become on the Fed's easy money policies.

Crude oil is likely to gain further as Brent and WTI crude rose to their highest since September. This follows a drop in US stockpiles, while tensions in West Asia over Syria developments are also propping up the bulls. Brent crude for delivery in August was up at $106.08 a barrel and WTI on NYMEX at $98.50.

Crude oil futures prices fell 0.44% to Rs 5638/barrel, a weakening trend in the Indian trade on profit-booking. Indian crude oil for delivery in June shed Rs 25 or 0.44% to Rs 5638/barrel in 5780 lots. Similarly, the oil for July delivery moved down by Rs 24 or 0.42% to Rs 5668/barrel. Trading sentiment eased at the futures trade as crude oil prices declined in Indian trade after investors took profits following last week’s rally triggered by concerns over rising tensions in West Asia.

What will happen with Indian Rupee, its continuously falling from the level at $53 to $59 with out making any normal correction of profit booking. Just recently Indian currency contracted to $59 against the US dollar before few trading sessions. In current scenario, Indian rupee is moving nearer to $57.68 which has shown some correction which is also called as some profit booking. In next, Indian currency is expected to move nearer to $56-57 for some time and may break ranges for higher volatility, but overall it will go above $60 in approx 5-6 months. Let us see which numbers are going to publish from Indian government. Previous horrible Indian data was completely negative for currency.

We are rounding off a week where USDJPY rose to a high of 99.30 before crashing to a low of 93.79, the Nikkei fell more than 6% and EURUSD and GBPUSD climbed to their highest level for four months. We will talk more about the events in Emerging markets in our Week Ahead report released later, but needless to say there was carnage in EM FX, which resulted in official intervention in Poland, Turkey, Indonesia, Brazil and India to stem the decline in their currencies.

The WPI-based inflation fell to 4.7% in May, driven mainly by declining prices of manufactured items, even as prices of food articles inched up. Inflation based on the Wholesale Price Index stood at 4.89% in April. In May 2012, it was 7.55%. WPI inflation in the manufactured items category declined to 3.11% in May from 3.41% in April.

USDJPY took another lurch lower overnight, dropping another 200 pips. This cross is at its lowest level since early April.

So is Abenomics unravelling? In our view it is a combination of the 2 factors:

1, uncertainty about the timing of Fed tapering, spooking stock markets and causing a flight to safety.

2, Signs that the BOJ may not be as committed to its stimulus plan as the market thought it was.

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.

OPTIONS PLAY: THE SIDEWAYS RANGE IN CRUDE DOES HAVE IT'S ADVANTAGES

Fortunately, for someone who has been in the biz for 14 years plus specializing in options I've tried just about anything and everything with option strategies. You win some and you lose some.

MY COMMENTARY

The rupee was trading strong by 19 paise to 58.20 against the dollar on fresh selling of dollar by banks and exporters. The rupee gained 15 paise to 58.24 against the dollar in the today’s opening session versus the previous close of 58.39. During previous trading session, the domestic unit plunged to a new low of 58.98 in the intra-day trade before recovering on the back of intervention by the Reserve Bank of India.

Gold prices on the Indian spot and futures market are likely to rule flat as the yellow metal searches for direction. During the weekend, a better-than-expected jobs data from the US led to re-emergence of speculation that the Federal Reserve could pare pumping money into the bonds market. With funds pruning their holds in gold-backed exchange funds, the prospect looks a little dim.