Wednesday February 6, 2013 - 03:36:47 GMT
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Morning Briefing : 06-Feb-2013 -0334 GMT
Dow Jones (13979.30, +0.71%) was up after a sharp fall on Monday. It is tough to say which way it will go from here. We would prefer to wait to see a firm break above 14000-200 resistance region or a break on the down side below 13750. Chances of it trading in the 13850-14050 are also there, we will have to wait and watch.
A-Pac is mostly in the green with Australia (4944.10, +0.85%), Hang Seng (23256, +0.47%) and Taiwan (7929, +0.54%).
Shanghai (2433.18, UNCH) held 2400 yesterday and is flat today. It is relatively stronger than the Indian and the US markets. While above 2400 a further rise towards 2480-90 is possible.
Nikkei (11386.27, +3.07%) held its 11000 support to bounce back. While above 11000, further rise to 12000 looks likely. The rally is also being supported by the USD-JPY (93.79) which can also see a further rise.
Nifty (5956.90, -0.51%) was lower yesterday and can dip to 5900 after which a good bounce looks likely.
Oil is trading mixed. Copper is stabilizing before further rise while Gold and Silver are mixed and ranged.
Nymex Crude (96.67, +0.03%) gained slightly as the US markets also recovered. Looks a bit mixed and can trade in the 95.50-98.50 tight range for some time.
Brent (116.74, +0.19%) in the immediate term can rise to 118.00 while it remains above 114.00. We have seen a good up move in both the Nymex and Brent to the targets we have been mentioning. Hence some consolidation cannot be ruled out.
Gold (1672) and Silver (31.78) are stuck in a narrow range over the last few days. Gold is retaining its 1625-1700 range while Silver is ranged between 31.00-32.30 and the outlook is not clear.
Copper (3.77) is stabilizing over the last couple of days and is bullish for a rise to 3.90-95 while it remains above 3.70.
The Euro and Swiss remain strong while the Pound and Yen are weaker against the Dollar. Aussie is at its crucial range Support. The Dollar-Index (79.53) has come off from its high of 79.78 and can move down to test its important 79.25-00 Support region.
The Euro (1.3583) has risen back taking Support from the 13-DMA (currently at 1.3476) and looks good for a rise to test its 1.3815-30 Resistance region after which a pull back is possible. Dollar-Yen (93.79) remains strong but is coming near an important Fibonacci Resistance (94.13) which needs to be watched. A break above this Resistance can take it further up to 95.00-30. The Euro-Yen Cross (127.40) is bullish and can rise to 128.80 (200-Month-MA) and even 130-131.
Dollar-Swiss (0.9070) is not gaining strength to rise above 0.9100 strongly and looks weak for a fall to 0.8900-8850. The Pound (1.5661) come off sharply failing to rise past 1.5800 yesterday. 1.5600 will now be a very crucial level to be watched which if broken can drag it further down to 1.5500 and even lower. Aussie (1.0355) is just above the lower end of its 1.0350-600 range and we will have to wait and see whether this range continues to hold or not. A strong break below 1.0350 will be bad and it can take it down to 1.0200-150.
In Asia, the USD-SGD (1.2368) continues to trade mixed and ranged between 1.2300-2400. Dollar-Rupee (53.1350) is ranged between 53.10 and 53.40 and a breakout on either side of this range will decide whether it goes up to 53.80 or comes down to 52.80.
Slight uptick in the Germany-USA 2-Yr spread from -0.05% to -0.02%. Overall trend points higher for the Spread, and therefore for the Euro. Spanish and Italian yields have dipped a little, by about 6-8bp. Some stability should come back to the European market, although we do not see yields dropping sharply. A broad sideways range is more likely.
US yields (10-Yr 2.01%, 30-Yr 3.22%) could stabilise a bit near current levels, having a good rise of 50-60bp or more since June last year. The Yield Curve may continue to steepen, however, with the markets talking about increased inflation expectatin the USA.
Increased inflation expectations in USA could drive some capital to some emerging economies which have been pursuing tight monetray policy over the last couple of years and where inflation could be coming down a bit. India could be a beneficiary, especially since the RBI has increased the debt limit for overseas investors.
Australia left its interest rates unchanged yesterday. The BOE and ECB meetings are due tomorrow.
No major data release today.
Australia Trade Balance
...Actual A$ -0.43 Bln ...Previous A$ -2.79 Bln
...Actual 3.0% ...Previous 3.0%
EU Retail Sales
...Actual -0.80% ...Previous -0.1%
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