Wednesday April 17, 2013 - 03:35:20 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 17-Apr-2013 -0333 GMT
The Support near 14599 mentioned yesterday has held well and the Dow (14756.78, +157.5, +1.08%) has risen sharply. The bounce was triggered by the sharp rise in Housing Starts (+1036) after the damp Retail Sales figure on Friday. We think the Dow can now target 14950 on the upside in a slow upmove.
Most of Asia-Pac is in the Green today apart from China (-0.10%) and Korea (-0.26%). The Nikkei (13365, +1.09%) is trading higher, but might find Resistance near 13600, the previous high. A period of consolidation between 12800-13600 would be good for a larger upmove later on. Else, there could be danger of a crash later on.
The Nifty (5688.95,120.55 ,+2.16%) rose very well yesterday despite lackluster global cues. This is a very bullish development. The 5630-5580 region could be a key buying area now. Immediate resistance seen around 5730-5760 and then higher near 5800.
Most commodities rebounded a bit yesterday, but we think its only a relief rally. Fresh fall could be seen. Gold (Spot 1380.88) seems merely consolidative within an overall liquidation move that can target 1300. Resistance seen at 1450.
Brent (100.23) is has bounced from 98. We see it rangging sideways between 103-98 for a while now. The Brent-WTI Spread (11.46) has been coming down sharply for the last several weeks. The WTI Crude (88.89) has a crucial Resistance near 90. The Gold/ WTI ratio (near 15.5) favours Crude in the coming days.
Copper (3.2885) moved up yesterday, but has decent Resistance near 3.32. This will need to be watched, as the outlook is not clear on Copper.
The Euro (1.3177) has risen sharply yesterday, averting a fall below 1.30. It will be in the clear if it manages to rise past 1.32. The rise in the German-US 10-Yr Spread (-0.43%) has helped the Euro, as suggested yesterday.
Dollar-Yen (98.2) rose sharply yesterday. The Support at 96.00 has held well. May see some consolidation between 97-99 before further rise. The Euro-Yen Cross (129.36) also saw a sharp rise yesterday and looks bullish going forward. Might help the Euro rise past 1.32.
The Pound (1.5353) found Support at 1.5273 itself yesterday and has bounced back. Might be good for a rise towards 1.5430. Good Support seen in the 1.5225-5170 region for the medium term. The Aussie (1.0362) bounced back a little yesterday alongwith commodities, but can fall towards 1.0220 in the coming days.
The Singapore Dollar (1.2329) trades strong, having gained past the 200-day MA at 1.2349. Further gains towards 1.23 are likely. The Brazilian Real (1.9853) has weakened this week on lower commodity prices and the weaker than expected Chinese GDP.
Dollar-Rupee (54.13) saw a good fall yesterday and can test 54.00-53.90 today. Important Support seen at 53.80. Could provide a bit of a bounce.
A slight uptick in US yields with the 10-Yr moving up from 1.68% to 1.72%. But, the 30-Yr (2.90%) still trades well below 3.00% and that's not too nice.
The Japanese 10-Yr (1.65%) continues to move up after bouncing sharply from 1.25% last week. The 5-Yr (0.26%) has also risen sharply from levels near 0.14% at the beginning of the month. The US-Japan 10-Yr Spread (1.11%) has a strong trendline Support and could move up in the coming days. This could push Dollar-Yen higher.
Indian 10-Yr GOI (7.83%) needs to break below 7.80% to fall further. The 10-Yr India-USA Spread is in an uptrend though. This casts a bit of doubt on further decline in GOI yields.
8:30 GMT or 14:00 IST UK BOE Minutes
...Expected 0-0-9 % ...Previous 0-0-9 %
8:30 GMT or 14:00 IST UK Unemp
...Expected 7.80 % ...Previous 7.80 %
14:00 GMT or 19:30 IST BOC Meeting
...Expected 1.00 % ...Previous 1.00 %
UK CPI Y/Y
...Actual 2.80 % ...Previous 2.80 %
EU CPI (YoY)
...Actual 1.70 % ...Previous 1.80 %
US Core CPI (MoM)
...Actual 0.10 % ...Previous 0.20 %
US Housing Starts
...Actual 1036 K ...Previous 968 K
US Industrial Production
...Actual 0.40 % ...Previous 1.12%
US Capacity Utilization
...Actual 78.50 % ...Previous 78.30 %
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