Friday March 8, 2013 - 03:34:40 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 08-Mar-2013 -0333 GMT
Dow Jones (14329.49, +0.23%) gained further and looks good for a further rise towards 14500. US NFP is due to be released today and the expectations are for it to stay flat at 151K as compared to 157K the previous month.
A-Pac is mostly in the green with Australia (5137.40, +0.28%), Hang Seng (22970, +0.87%) and Taiwan (8010, +0.62%).
Shanghai (2323.82, -0.02%) continues to trade flat near its support of 2300. Chances of a correction towards 2250 are still their. China exports have grown 23.6% (January and February combined) which is good news.
Nikkei (12219, +2.10%) has risen strongly breaking above its 12000 resistance. A weekly close above 12000 will be very bullish for the index which can take it higher towards 12500+ levels in the coming days. We will have to wait and watch.
Nifty (5863.30, +0.77%) rose further up yesterday adding to its gain. It needs to break its 5865 and 5915 resistances to see a sustained rise. If these resistances are held then the danger of a move lower will be high.
Oil is slightly higher. Gold has taken resistance, Silver seems range in the near term and Copper is flat at the support.
Nymex Crude (91.32, -0.26%) has risen from its 89-88 support yesterday but needs to rise further up strongly to reduce the selling pressure. A dip again either from current levels or from 93.00 will be bad for oil.
Brent (110.76, -0.35%) has not gained and is flat near its 110-09 support. Brent needs to hold this support and rise or else a danger of a fall towards 105.00 on the break of 110-09 remains.
Gold (1576.70, +0.10%) has taken resistance near 1585 and can dip from here towards 1515 in the coming sessions while below 1585.
Silver (28.79, -0.06%) is trading flat and seems to be developing a 28-29.50 range. A break on the down side will take it lower towards 26.50 in the coming sessions.
Copper (3.52, +0.20%) is also flat near its 3.50 support. We need to see if this holds or breaks. A break will take it lower towards 3.30, we will have to wait and watch.
Good rise in the Euro (1.3093) even though Draghi reduced growth projections for 2013 to -0.5% from to -0.3%. It is reported that he has used a EURUSD rate of 1.35 for his calculations. Although there is Resistance at 1.3120 today, the fact that the Euro has bounced from the sub-1.30 region is good. The Dollar Index (82.11) is not being able to rise past strong Resistance at 82.80 just now.
The Pound (1.5002) had risen to 1.5082 after the BOE kept rates and QE unchanged, but fell back through the US session as the Euro rose. The overall downtrend persists. Dollar-Yen (95.28) has risen strongly past the 94.25 range resistance, resolving February's sideways consolidation on the upside. There is some Resistance near current levels but we can see 97.50 if it breaks. The Euro-Yen (124.72) has also risen strongly, but has Resistance near current levels for the day. It can target 130 in the medium term though.
Dollar-Swiss (0.9446) has falllen back from a rise to 0.9485, pushed down by Euro strength. The weekly chart has Resistance at 0.9500 and there are chances of a dip towards 0.93, maybe next week. The Aussie (1.0238) has been finding good Resistance in the 1.0280-0300 region over the last couple of days. It may continue to consolidate between 1.0225-0300 for a couple of days more.
Dollar-Rupee (54.5650) may fall towards 54.40 today on Euro strength.
The BOJ, BOE and ECB left interest rates unchanged yesterday. The Yen and Pound have weakened while the Euro has strengthened a little bit. The market is fully pricing in a quantitative easing by Japan when Kuroda takes over as Governor. Japan has achieved a lot of Yen weakness this year only on the basis of a promise of reflation. Good work!
The Spain 10-Yr (4.89%) has fallen below 5.0% again and the Italian 10-Yr (4.60%) is now comfortably below 4.70%. Draghi yesterday said that money market "fragmentation" is reducing. The Spain-Germany 10-Yr Spread (3.40%) has come down from levels near 3.70% earlier in the week. Although the correlation between this Spread and the Euro has weakened recently, the easing of bond market tensions in Europe should be good for the Euro overall.
The US 10-Yr (2.0%) has come back to the magic 2% again and the 30-Yr (3.21%) has also risen strongly, up from 3.15% earlier. Overall, global bond markets are looking a lot stabler today morning than in a long time. Everyone can have a good weekend if today's NFP release is also good. Amen to that.
22:50 or 5:20 JP GDP
...Expected -0.10% ...Previous -0.10%
12:30 or 19:00 US NFP
...Expected 151K ...Previous 157 K
12:30 or 19:00 US Unemployment Rate
...Expected 7.90 % ...Previous 7.90 %
12:30 or 19:00 CA Labour Force
...Expected 7.60 K ...Previous -21.90 K
9:00 or 15:30 EU EA (17) Curr Acct Bal
...Previous 28.80 £ (Bln)
Australia Trade Balance
...Actual -1.06 A$ Bln ...Previous -0.69 A$ Bln
...Actual <0.10 % ...Previous <0.10 %
...Actual 0.50 % ...Previous 0.50 %
...Actual 0.75% ...Previous 0.75 %
US Trade Balance
...Actual -44.45 $ Bln ...Previous -38.14 $ Bln
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