Monday March 18, 2013 - 03:37:43 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 18-Mar-2013 -0335 GMT
Asia-Pac indices are down sharply, pushed down by the fall in the Euro because of the Cyprus deposit issue. The Nikkei (12297, -2.1%), Hang Seng (22019, -2.27%) and Shanghai (2254, -1.02%) are all down.
The Dow (14514.11) might be vulnerable to a corrective dip towards 14250-200.
The Nifty (5872.60) may well fall towards 5800-5750 this week. A sharp fall today might bring in brave Buyers ahead of the RBI's meeting tomorrow, where a rate cut is widely expected.
Gold (1595.60) has been finding Support in the 1560-50 region since 21-Feb. It might rise towards 1650 before falling towards 1550 again.
Brent (108.48) looks bearish on the Daily Candles. A break below last week's low near 107.80 could push it down towards 105. The Brent-WTI spread (16) has been coming down sharply over the last several weeks, but could move back up from here. WTI (92.18) may also fall towards 90-91.
The Euro (1.2900) has crashed today morning from Friday's close near 1.3076. Cyprus, under pressure from EU finance minsters, is going to apportion a part of bank deposits in order to raise 5.8 bln Euros. This seems preposterous and is likely to push the Euro down towards 1.28-27.
Dollar-Yen (94.70) has fallen, pulled down by the Euro-Yen (122.14) which is down sharply from 124.58 Friday. Dollar-Yen can fall towards 94.00 or even 93.50. The Cross may fall towards 118.50 on break of immediate Support at 121.50.
Dollar-Swiss (0.9435) has opened gap-up, reflecting the Euro's fall. The EURCHF (1.2176) is being kept steady by the SNB. The Pound (1.5104) might rise towards 1.53, benefitting from the Euro's weakness. The Aussie (1.0357) has opened gap-down as a "risk off" reaction to the Euro's decline. But, it has good Support at 1.0320 and could rise later in the week.
Dollar-Rupee (54.0050) may well rise today on account of the Euro. In any case, there is decent buying interest in the 53.90-80 region.
The RBI interest rate decision is due tomorrow. Everybody is hoping for a rate cut. The RBI might even be swayed to counter the impact of the development in Cyprus-Europe over the weekend. A rate cut is highly likely.
German yields are falling again for the last few days as a symptom of fresh trouble/ concerns in Europe. The 2-Yr (0.05%) is trading just above 0% but might well fall into negative terrotory again.
Globally, interest rates could cool off for a while.
10:00 or 15:30 EU Trade Bal
...Previous 11.70 EUR Bln
EU CPI (YoY)
...Actual 1.79 % ...Previous 1.92 %
US Core CPI (MoM)
...Actual 0.20 % ...Previous 0.25 %
US TICS (Net foreign purch of long-term Sec)
...Actual 25.69 $ Bln ...Previous 64.19 $ Bln
US Industrial Production
...Actual 0.71 % ...Previous 0.10 %
US Capacity Utilization
...Actual 79.60 % ...Previous 79.20 %
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