Thursday February 14, 2013 - 03:36:44 GMT
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Morning Briefing : 14-Feb-2013 -0335 GMT
Dow Jones (13982.91, -0.26%) ended lower holding its 13850-14050 range. We need to wait and watch to see which side the range breaks before taking a call. US Retail Sales were at 0.14% (MoM) slightly better than the market expectation of 0.10%, where as we were expecting a better retail sales data at 0.90%.
A-Pac is mostly trading in the green with Australia (5053, +0.56%), Hang Seng (23423, +0.90%) and Taiwan (7907, +0.25%).
Shanghai (2432.40) is closed for the whole week on account of the Chinese New Year holidays.
Nikkei (11314, +0.55%) is slightly higher today but can trade in the sideways 11000-11475 range for some time. Medium term outlook remains positive while it continues to sustain above 11000 levels.
Nifty (5932.95, +0.18%) could not hold on to its gains as it slipped from its days high. 5900 support continues to be crucial for the markets to move up from these levels and while this is in place it can still move up towards 6100+ levels in the coming days. Follow up buying has to be seen on a bounce from 5900 levels and index needs to catch some momentum.
Brent and Nymex Crude remains bullish while Gold and Silver are looking weak. Copper could consolidate before further rise.
Nymex Crude (97.21) is consolidating between 95 and 98 for the third week now within its overll uptrend. 103-106 can be targeted on the upside in the coming days/weeks. 93-90 is a strong Support region below the current range Support of 95.
Brent Crude (117.96) has come off a bit yesterday. The overall picture remains bullish for a rise to 121-123. But a corrective dip to 115-113 cannot be ruled out before seeing a rise incase if the immediate Support at 117 is broken.
Gold (1644.60) remains lower. Although it has some Support near 1640, the weekly chart is looking weak and there is a threat to see a fall towards 1550-1500 in the coming weeks.
The Gold/Crude (16.92) ratio has broken its important long term trendline Support at 17.50 and can now fall to 15.50-15.00 region suggesting that the fall in Gold to 1550-1500 is more likely.
Silver (30.82) looks weak and can fall to 29.
Copper (3.74) is consolidating above 3.70 over the last few days and the outlook remains bullish for a rise to 3.90-95 while it remains above 3.70.
The Euro (1.3450) has come off from near the 200-week MA at 1.3530, despite the dip in Spanish yields. Appears consolidative in a range of 1.34-35. The Yen (93.48) is waiting for the BOJ release today. The BOJ may/ may not announce balance sheet expansion immediately, ahead of the G20 meeting on the weekend. Support at 93.00-92.80 needs to be watched. A break can take USDJPY down to 92.00.
The Euro-Yen (125.75) has been trading sideways between 123.40-127.10 for the past few days and can dip to 123.25 again if Dollar-Yen dips.
The Pound (1.5539) has broken below a very important long-term support trendline at 1.5615 and can be bearish going forward. Dollar-Swiss (0.9169) has been consolidating sideways. The overall trend remains bearish though as even EURCHF (1.2335) could be facing Resistance.
The Aussie (1.0360) has rebounded strongly over the last two days after the "false" dip to 1.0227. It can rise to 1.04+ while above the 200-day MA at 1.0313. The Brazilan Real (1.9633) remains strong for now but could weaken in the coming weeks, if we believe the charts. The Sing Dollar (1.2352) has strengthened over the last couple of days. The EURSGD (1.6607) has seen a dip last week and looks consolidative.
Dollar-Rupee (53.82) could dip to 53.60-50-40 which is a very important Support region.
Solid dip in the Spanish 10-Yr (5.2%, -12bp). The Spain-Germany 10-Yr Spread (3.53%) has also dropped a good bit. That's good news. The EU Industrial Production showed a 0.73% M/m rise against a market expectation of 0.2%. Take a look at
Importantly, the fear of a fresh European meltdown should ease. The rise in Spanish/ Italian yields over the last few weeks may be seen as a natural correction, in line with our reading.
The US 10-Yr (2.05%) has risen above 2% again. Yesterday's US Retail Sales was positive, although much less than what we were expecting. The German-US 2 Yr Spread (-0.05%) has moved up slightly from levels near -0.10%. Should be good for the Euro.
The BOJ release is awaited.
5:07 GMT or 11:37 IST BOJ Meeting (%)
...Expected <0.10% ...Previous <0.10%
9:00 GMT or 15:30 IST EU GDP
...Expected -0.40% ...Previous -0.10%
23:50 GMT or 6:20 IST JP GDP
GMT or 6:30 IST IN WPI
EU IND Prodn (MoM)
...Actual 0.73 % ...Previous -0.30 %
EU IND Prodn (YoY)
...Actual -2.23 % ...Previous -3.51 %
US Retail Sales
...Actual 0.1 % ...Previous 0.4 %
IN Trade bal
...Actual -20.00 $ Bln ...Previous -17.67 $ Bln
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