Friday February 8, 2013 - 03:37:04 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 08-Feb-2013 -0335 GMT
Dow Jones (13944.05, -0.30%) ended lower after ECB President Mario Draghi’s comments on the exchange rate (EUR-USD). Index continues to trade in the 13850-14050 range. We will have to wait and watch for further direction.
A-Pac is mostly in the green with Australia (4981.30, +0.51%, Hang Seng (23213.18, +0.16%) and Taiwan (7906.65, +0.25%).
Shanghai (2422.53, +0.17%) saw an intraday dip yesterday but recovered from the days low to close marginally above 2420. It can continue rising towards 2490.
Nikkei (11200.40, -1.38%) is lower again. Immediate support is seen at 11000 which has to be watched.
Nifty (5938.80, -0.34%) dipped lower as expected. It is currently at a very Crucial support. Even though the US markets have ended in the red it will be though for the Nifty to close below 5900. Wait and watch.
Nymex has dipped, Brent has held well but is now near its 118 resistance. Some consolidation and marginal dip in Crude is likely. Gold and Silver remains ranged and mixed. Copper can test its Support before further rise.
Nymex Crude (96.06, +0.24%) dipped in the US sessions yesterday and as mentioned a tight 95-98 range can develop. A break on either side will tell us if it moves towards 93 or 101-103.
Brent (117.52, +0.24%) has traded relatively stronger than Nymex and has almost achieved its 118 target. Trend remains up but some consolidation can be seen now. Immediate support is at 115-13.
The Euro and Swiss has weakened after yesterday's ECB Meeting. Aussie is weak as the RBA has cut the GDP forecast for 2013. The Pound has bounced back following the comments from the incoming BOE Governor signalling no further stimulus is on the cards. The Dollar-Index (80.15) has shot up above 80 and can rise further to 80.60-70 while above 80. The 79-81 range remains intact.
The Euro (1.3413) tanked after the ECB Meeting to test its important Support near 1.3375 which should continue to hold to avert further fall to 1.3300 and lower levels. Dollar-Yen (93.50) remains higher and is consolidating between 93 and 94. The chances of seeing a pull back to 92.50 is still there while it remains below 94. The Euro-Yen Cross (125.45) has come off sharply and can move down further to 124-123 if it fails to rise past 126 from here.
Dollar-Swiss (0.9178) has risen sharply and can rise further to 0.9250-300 on a strong break above 0.9200. The Pound (1.5718) has bounced back well and looks good now for a rise to 1.5800 and even 1.5900. Aussie (1.0294) has broken its 200-DMA (currently at 1.0308) and now has a threat to fall towards 1.0200-150. Intermediate Support is there near 1.0250 which is holding as of now.
The Brazilian Real (1.9651) has strengthened further on hopes that Central Bank will allow the currency to remain strong following the Bank's comments on high inflation. Technically the Real has further room on the downside to strengthen further to 1.9450-30. Dollar-Rupee (53.22) is stable and is continuing to be ranged between 53.10-40.
Although the Euro weakened after Draghi's news conference yesterday, the Spanish 10-Yr (5.42%, -3bp) has in fact dipped a little. The Resistance at 5.55% should be strong, therefore. The corresponding Resistance for the Spain-Germany 10-Yr spread (3.82%) should be around 3.95%. Look for a fairly long period of sideways consolidation.
The Germany-USA 2-Yr Spread (-0.07%) has come off sharply below Zero again, reflecting in Euro weakness. A test of -0.10 to -0.12% could be seen, before the Spread stabilises in its overall uptrend. The US 10-Yr (1.96%) is hesitant to cross 2% decisively for now.
The Indian 10-Yr (7.88%) dipped 3bp yesterday after the 5% FY-13 GDP forecast by the CSO. You might remember that we'd said "we could see yields dipping again" yesterday. We can hope to see 7.83-7.82% in some time. Further decline will be seen if 7.80% is broken on the downside.
12:30 GMT or 19:00 IST CA Labour Force
...Expected 4.5K ... Previous 39.8 K
13:30 GMT or 20:00 IST US Trade Balance
...Expected -45.80 $ Bln ...Previous -48.73 $ Bln
Australia Labour Force
... Actual 10.4 K ...Previous-5.71 K
UK Trade Balance
...Actual -8.90 £ Bln ...Previous -9.28 £ Bln
...Actual 0.50 % ...Previous 0.50 %
...Actual 0.75% ...Previous 0.75%
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