Tuesday January 22, 2013 - 04:44:34 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 22-Jan-2013 -0441 GMT
Dow Jones (13649.70) would be interesting to watch if it breaks 13700 or not. Also in focus will be the Existing Home sales numbers which are expected to come at around 5.11 Mln. Good chances of the expectations being met and even being exceeded after the upbeat Housing Starts numbers.
A-Pac is mostly in the red today Australia (4793.60, -0.18%), Hang Seng (23591, UNCH), Taiwan (7720, -0.06%).
Shanghai (2322.26, -0.26%) is mildly in the red below its important 2325-50 level which will be important for the index going forward. Chances of it consolidating below 2350 for some time cannot be ruled out.
Nikkei (10683.47, -0.60%) is lower ahead of the BOJ. A close below 10800-775 will put pressure for further dip towards 10300.
Nifty (6082.30, +0.30%) is not gaining momentum to move up and a corrective dip to 5925-00 might well be seen. Good earnings are keeping the market afloat and there is also a thought that one bad news will start this corrective fall/dip. Picture remains very good in the longer term though.
Oil has moved up as Nymex continues to look good. Gold has inched closer to the upper end of the trading range; Silver and Copper can rise further.
Nymex Crude (95.45, -0.12%) continues to look strong while above 95.00 for a further rise towards 103.00 in the coming days.
Brent (111.93, +0.20%) has moved up a bit but is still below its crucial 113.00 level which remains has to be broken if a move on the upside (towards 116-18) is to be seen.
Gold (1691.40, +0.26%) has also inched closer in its 1625-1700 range. And it remains to be seen if it continues to remain range bound or breaks out on the upside.
Silver (31.99, +0.20%) looks good and is likely to carry itself further up towards 33.50-34.00 in the coming sessions.
Copper (3.68, +0.23%) dipped a bit yesterday but can rise towards 3.75 in the coming days.
Market remains calm and flat. The outcome of the BOJ Meeting which is due in some time will be in focus today. The Dollar-Index (80.02) is flat near 80 and will need a strong break above 80.10-15 Resistance region to rise further towards the upper end of its 79.00-80.70 sideways range.
The Euro (1.3308) is trading flat above 1.3300 and is retaining its 1.3250-3400. While below 1.3400 we see good chances of a dip to 1.3200-100 before any further rise. Dollar-Yen (89.44) has not broken above 90 and is waiting for the BOJ announcement today. While below 90, profit taking pull back to 88.50-88 looks likely now. The Euro-Yen Cross (119) has come off failing to rise past 120. A pull back in the Dollar-Yen can drag the Cross down to 117.50-117.
Dollar-Swiss (0.9338) sustains above 0.9300 and remains bullish for a rise to 0.9400-50. The Pound (1.5836) remains weak below 1.5900 and can move down further to test 1.5750-00. Aussie (1.0533) continues to trade mixed and ranged between 1.0500-600.
In Asia, the USD-SGD (1.2885) is inching up higher towards the upper end of its 1.2150-2350 sideways range. Dollar-Rupee (53.7750) has come off from its high of 53.95 yesterday and can dip to 53.50-35 today.
Spanish 10Yr yield has risen 8bps to 5.16% and is just above its 5.15% Resistance level. The chances of the yield seeing 4.80% on the downside stands reduced now and we expect the Spanish 10Yr yield to rise towards 5.50% in the coming days. The Spain-German yield spread is flat at 3.52% and can rise to 3.75% in the coming days.
The US 10Yr yield has risen 4bps to 1.86%. As mentioned yesterday, the treasury 10Yr yield can rise to 2.20% in the coming days.
The BOJ Meeting is today and the market will be waiting to see the quantum of stimulus that will be announced. It is to be noted that Japan's new Prime Minister has urged the BOJ to set an inflation target of 2% as their near term goal.
5:07 GMT or 11:37 IST BOJ Meeting
...Expected <0.10% ...Previous <0.10%
14:00 GMT or 20:30 IST US Existing Home Sales
...Expected 5.11 Mln...Previous 5.04 Mln
No major data release yesterday.
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