Friday January 25, 2013 - 03:32:00 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 25-Jan-2013 -0328 GMT
Dow Jones (13825.33, +0.33%) gained further and remains positive for a further rise to 14000+ levels. Sentiment remains positive for the markets. Expectations for New home Sales which is due today is 383K.
A-Pac is mostly in the green with Australia (4851.80, +0.37%), Hang Seng (23561.60, -0.16%) and Taiwan (7647.80, +0.63%).
Shanghai (2295.46, -0.31%) has held the 2350-60 resistance very well and can see some correction towards 2200 in the coming days.
Nikkei (10841.72, +2.08%) has risen again, it seems to be stronger than we anticipated. The 3-Day candle looks very good (take a look http://www.kshitij.com/graphgallery/nikkeicandle.shtml#candle). The correction that we are looking for might be avoided and we can see a rise towards 11300 from current levels it self. The monthly CPI has further eased by 0.20% while the BOJ has kept an inflationary target of 2%, which suggests it might take up further easing that will weaken the Yen and hence the rally in Nikkei. Markets seem to be discounting the inevitable.
Nifty (6019.35, -0.58%) dipped yesterday but the real trouble was seen in the Midcaps which were slaughtered. Nifty is holding on to 6000 but the steam is fizzling and a break of 6000 might just give the required TRIGGER for some down side towards 5925-00.
Nymex is flat and Brent has risen slightly. Gold continues to remain ranged, Silver is mixed and Copper has support just below current levels.
Nymex Crude (95.86, -0.09%) traded flat within its overall uptrend targeting 103 in the coming days/weeks. Down side to 94-93 is expected to find buyers.
Brent (113.12, -0.14%) rose slightly but still needs to break above 113-15 levels for a strong rise towards 118.00.
Gold (1667.90, -0.12%) has dipped inside its 1700-1625 range; it can remain range bound for some more days. In the immediate term a dip towards its lower end of the range looks likely.
Silver (31.64, -0.24%) has dipped mid way but has support near 31.00 and 30.50. We will have to wait and see.
Copper (3.69, +0.39%) has good support near 3.67-65 levels which needs to be held and a firm break above 3.75 has to be seen for a further rise towards 3.85-90 levels.
The Euro and Swiss are ranged while the Yen, Pound and Aussie are trading weak against the Dollar. The Dollar-Index (79.98) remains ranged between 79.50 and 80.20 and will need a strong break above 80.20 to rise higher towards 80.80-81.00.
The Euro (1.3362) retains its 1.3250-3400 sideways range and is now coming down from near the upper end of this range. Dollar-Yen (90.50) has risen further breaking above 90 and can test 90.80-91.00 today and can rise further to 92.00-20 while above 90 in the coming days. The Euro-Yen Cross (121.07) has seen a decisive break above 120 and can now target 122-123 on the upside.
Dollar-Swiss (0.9303) is holding above its 0.9270 Support and is narrowly ranged between 0.9270 and 0.9325 with a bullish bias for a rise to 0.9400-50. The Pound (1.5783) has dropped below 1.5800 and looks weak for further fall to 1.5650-5550. The UK GDP data release is due today which should be watched. Aussie (1.0447) has broken its 1.0500-600 range on the downside and can now move down further to test 1.0400-380.
In Asia, the USD-SGD (1.2308) has risen above 1.2300 and can rise further to 1.2330-50 which is the upper end of its 1.2150-2350 sideways range that it has been trading for some time. Dollar-Rupee (53.67/68) is continuing to get Resistance near 53.90 and is looking mixed. Market is closed today on account of Eid-e-Milad holiday.
The Spanish 10Yr yield has come down further by 6bps to 5.01%. The Resistance in 5.10%-5.15% has held very well. A dip below 5% can take it further down to 4.90%-4.80%. The Spain-German 10Yr yield spread has also come down well below 3.5% towards 3.44% (down 9bps) and can move down further to 3.25% once again.
The US 10Yr yield has bounced back 3bps to 1.85% and remains bullish for a rise to 2.00%-2.20%.
8:00 GMT or 14:30 IST GER IFO Business Climate
...Expected 103.00 ...Previous 102.4
8:00 GMT or 14:30 IST GER IFO Business Situations
...Expected 107.20 ...Previous 107.1
8:00 GMT or 14:30 IST GER IFO Business Expectations
...Expected 99.00 ...Previous 97.9
8:30 GMT or 15:00 IST UK GDP (%)
...Expected -0.20 ...Previous 0.98
12:30 GMT or 19:00 IST CA Core Inflation Index Y/Y
...Expected 1.2% ...Previous 0.8%
14:00 GMT or 20:30 IST US New Home Sales
...Expected 383 K ...Previous 377 K
EU EA (17) Curr Acct Bal
...Actual EUR 28.8 bln ...Previous EUR 26.1 bln
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