Tuesday January 15, 2013 - 03:36:56 GMT
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Morning Briefing : 15-Jan-2013 -0334 GMT
GOOD MORNING!
EQUITIES
Dow Jones (13507.32, +0.14%) was flat to positive with no major news from the markets. Fed chairman Ben Bernanke would be speaking today in the US session, we hope the market takes cues from their and gives us a direction. The index is does not look weak and a break of 13500-600 will be very good for the index.
A-Pac is mostly trading flat but are in the green with Australia (4753, +0.16%), Hang Seng (23438, +0.11%), and Taiwan (7789, -0.15%) as no major cues from the US.
Shanghai (2318.74, +0.30%) was up strongly yesterday after the market regulator said that they may increase the FII investment limit. It has some resistance near 2325-50 levels which needs to be crossed for a further rise. The trend remains bullish even if the resistance is held on the first test.
Nikkei (10941.65, +1.30%) is up again as mentioned yesterday and is targeting 11300 in the coming days.
Nifty (6024.05, +1.20%) was up as the GAAR has been deferred to assessment year 2016-17 (this was partially in the markets). Further strength was given by the better than expected WPI of 7.18% (expected was 7.40%). The markets also discounted an easing of 25-50bip rate cut in the up coming RBI Meeting. Index is now looking strong for the coming days/weeks though it needs to break its recent high of 6045 to find more steam for a rise towards 6300.
COMMODITIES
Oil was up slightly and looking better, Gold mixed/ranged but looks weak, Silver can rise in the range while Copper is likely to dip further.
Nymex Crude (94.04,-0.11%) is looking good on the line charts but needs to see a strong rise above 95.00. It can then move higher towards 103.00 levels.
Brent (111.80, -0.07%) is hovering around 112-13 resistances; good thing is that it is not seeing a fall from these levels. An upward break will push it up towards 116-18 in the coming days.
Gold (1672.50, +0.19%) found resistance on the rise to 1675 yesterday and it can dip towards 1625-00. Chances of it trading in the 1700-1625 range also cannot be ruled out.
Silver (31.20, +0.31%) has risen inside the 29.75-31.75 range and is likely to rise further.
Copper (3.64, +0.39%) seems to have started its decline towards 3.60 and 3.50 levels.
CURRENCIES
Market remains mixed in the immediate term but the broader outlook is in favour of the risky assets going forward. The Dollar-Index (79.45) has important Support at 79.33 (200-Week-MA) which needs to be broken for it to move further down to 79.00-78.90. We willl have to wait and see.
The Euro (1.3376) is holding above 1.3300 but needs to gain momentum to break and rise above 1.3400 towards 1.3500-50. Dollar-Yen (88.81) has dipped below 89 and can test 88.30-00 before we see a fresh rise to 90+ levels. The Euro-Yen Cross (118.72) has come off sharply from its high of 120.12 and can extend this corrective dip to 117.50 now.
Dollar-Swiss (0.9232) is holding above 0.9100 and has risen well within its 0.9080-9300 sideways range. We expect it to retain this range. The Pound (1.6090) remains mixed and ranged between 1.6000 and 1.6300. Aussie (1.0525) is holding above 1.0500 but is not gaining strength to break above 1.0600 which is very much needed for it to rise further. While below 1.0600, it can broadly be ranged between 1.0400 and 1.0600.
In Asia, the USD-SGD (1.2241) remains flat and ranged between 1.2200 and 1.2300. Dollar-Rupee (54.50) had closed lower yesterday, but has Support near 54.40 which needs to be for it to move down to 54.25-20.
INTEREST RATES
The Spanish 10Yr yield has risen back above the 5% level and is now at 5.03% (up 14bps). While above 5% there are chances for the yield to rise further to 5.15% now. Important to note is that the 3.25% Support that we have been mentioning for some time for the Spain-German yield spread has held very well and the spread has risen sharply by 17bps to 3.48%. Good chances for the spread to rise further towards 3.75%. This could prevent the Euro from seeing an immediate break and sharp rise above 1.3400. We will have to wait and watch.
In India, the WPI data came in better at 7.18% against the market expectation of 7.40%. This has left more room for the RBI to cut the rates on 29-Jan-13.
DATA TODAY
9:00 GMT or 15:30 IST EU Trade Bal
...Expected 8.2 Bln ...Previous 7.9 Bln
9:30 GMT or 16:00 IST UK CPI Y/Y
...Expected 2.70% ...Previous 2.70%
12:30 GMT or 19:00 IST US PPI ex Food & Energy (YoY)
...Expected 1.90% ...Previous 2.17%
12:30 GMT or 19:00 IST US PPI ex Food & Energy (MoM)
...Expected 0.20% ...Previous 0.10%
12:30 GMT or 19:00 IST US Retail Sales
...Expected 0.2% ...Previous 0.2%
DATA YESTERDAY
IN WPI (YoY)
...Actual 7.18% ...Previous 7.32%
EU IND Prodn (YoY)
...Actual -3.51% ...Previous -3.50%
EU IND Prodn (MoM)
...Actual -0.30% ...Previous -1.00%
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