Thursday March 14, 2013 - 03:34:36 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 14-Mar-2013 -0332 GMT
Despite the very good US Retail Sales data yesterday, the Dow (14455.28, +5.22, +0.04%) managed only a very meagre gain. It appears vulnerable to some profit booking after a good rally from 13800 levels.
A-Pac is mostly in the red with Australia (5060, -0.87%), Hang Seng (22393, -0.72%) and Taiwan (7974.40, -0.26%). Australia Lab Force (MoM) has come in better than expected at 71.5K against expected of 9.5K.
Shanghai (2263.39, -0.03%) is flat after dipping below 2300. Has some support at 2250, it can either trade in the 2250-2350 range or can even see deeper correction if it breaks 2250.
Nikkei (12265.87, +0.21%) is trading higher today after dipping for a couple of days. It has seen a good rally and some profit taking is acceptable. Support is seen near 12000-11900 levels.
Nifty (5851.20, -1.06%) has dipped sharply in the past 2 days. It might see further down side towards 5750 which is its trend line support on the weekly line charts.
Nymex is looking better than Brent, which can weaken further. Gold and Silver are ranged in the near term. Copper is at an important support.
Nymex Crude (92.35, -0.18%) has risen from an important support of 89 in the past few days. But the weakness in Brent is a bit worrying. Brent (108.32, -0.18%) has broken its important support at 109 and can see further fall towards 105.
Gold (1585.90, -0.16%) is trading in the 1560-1600 range in the near term. The longer term dip towards 1520 is still a possibility while below 1615.
Silver (28.81, -0.51%) is trading in the 28-29.50 rage in the near term. A break of the range on the down side can be bad for Silver as it can then see a fall towards 26.50-00.
Copper (3.52, -0.06%) continues to trade near its support of 3.50, which will decide which way the commodity goes.
We mentioned this a few days ago. Its been a very very long time but the Dollar is seen to be reacting positively to good US economic news. US Retail Sales (+1.1% M/m against our expectation of +0.87%) is cited as reason for the drop in the Euro (1.2965) to a low of 1.2923 yesterday. The Dollar Index (82.92) is trying to break previous resistance near 82.80 and will target 83.85 if successful. That could weaken the Euro further.
Dollar-Yen (95.82) is stabilising, finding some Support near 95.50 yesterday. Deeper Support is available at 95.00 also. The Euro-Yen (124.19) has come down to Support near 124.05. Further Support is seen near 123.40-20. A fresh upmove could start soon.
The Pound (1.4950) has moved up well over the last couple of days and can rise further to test 1.4995 today. Fresh selling might come in there. Dollar-Swiss (0.9522) rose strongly yesterday alongwith the fall in the Euro and can target 0.9690 over the rest of the month.
The Aussie (1.0372) has risen further today as the Australian Labour Force data has come in much better than expected. This lessens the gloom around Australia. There is some Resistance near 1.04 now, but the rally has given rise to hopes of seeing further upmove towards 1.05.
Dollar-Rupee rose well from 54.00 yesterday to close near 54.30-31 and is likely to test 54.45 today.
The yield spread between Germany and USA (2 Yr -0.20%, 10-Yr -0.55%) look like they can fall further in favour of the Dollar, pushing the Euro lower. The USA-Japan yield spread (10-Yr 1.4%) continues to inch up in favour of the Dollar and can target 1.50% in the coming weeks, pushing Dollar-Yen higher.
The Spain-Germany 10-Yr Spread (3.29%) has increased a little bit from 3.24% on Monday. The Italian 10-Yr (4.67%) is also trading higher, up from 4.6% last Friday.
The India WPI figure is to be released tomorrow. After a high CPI on Tuesday, the market will want to see if there is a dip like last month to 6.62%. That will be very important for the upcoming RBI Meeting next Tuesday where a rate cut is ardently hoped for.
0:30 or 6:00 Australia Labour Force
...Expected 10.70 K ...Previous 10.40 K
5:30 or 11:00 IN WPI
...Expected 6.62 %
8:30 or 14:00 SNB Meeting
...Expected < 0.25 % ...Previous < 0.25%
12:30 or 18:00 US PPI ex Food & Energy (MoM)
...Expected 0.20 % ...Previous 0.22 %
12:30 or 18:00 US PPI ex Food & Energy (YoY)
...Expected 1.80 % ...Previous 1.77 %
12:30 or 18:00 US Current Account Balance
...Expected -111.00 $ Bln ...Previous -107.51 $ Bln
EU IND Prodn (MoM)
...Actual -0.40 % ...Previous 0.91 %
EU IND Prodn (YoY)
...Actual -2.08 % ...Previous 0.81 %
US Retail Sales (MoM)
...Actual 1.10 % ...Previous 0.33 %
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