Monday June 10, 2013 - 03:35:32 GMT
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Morning Briefing : 10-Jun-2013 -0333 GMT
Decent bounce in most Equity indices worldwide over Friday/ today.
Japanese Q1 GDP has been revised up to +1.0% from +0.9% earlier and compared to forecast fo +0.9%. The Nikkei (13238) is up a good 2.7%, in line with expectation. Needs a rise past 13750 to reduce danger of further fall towards 11750. All eyes on the BOJ Meeting tomorrow.
The Dow (15248.12, +207.50, +1.38%) rose well on Friday, possibly comforted by a 7.6% print on the Unemployment number compared to 7.5% earlier. The number can stabilise between 7.3-7.7% for a couple of months before faling further. Further rise possible in the Dow as economic data might not scare off people. The DAX (8254.68) also rose well on Friday.
Most of the rest of Asia-Pac is also up a decent bit today. China and Australia are on holiday. The Nifty (5881.00) had closed weak on Friday, but could bounce from the 21-week MA near current levels.
Gold (1386.60) fell on Friday, but it likely to trade sideways between 1375-1425 for some more days, as suggested earlier. People who have gone Long recently, will be hurt by this. Silver (21.77) has started falling, as expected, and should target 20.00. Remember, Silver looks weaker than Gold.
Copper (3.2360) had fallen on Friday and has seen a low near 3.20 today, breaking out of an earlier sideways range of 3.25-3.40. Expect an overall sideways range of 3.20-3.40 for some days now.
Brent (104.70) has broken above 104.00 and can move up towards 106, as warned last week.
The Euro (1.3204) fell back on Friday after seeing 1.33 on Thursday. The overall rise from 1.2850 has Support at 1.3175-65 now and the Euro could target 1.34 if that holds. The Pound (1.5534) also saw profit-taking from Thursday's high near 1.5684. Trend Support seen at 1.5475. But, upside potential could be capped near 1.5600 as the EUR-GBP (0.85) could move up towards 0.8515.
Dollar-Yen (98.01) has recovered well enough from Friday's low of 95.00. We had suggested Support at 94.90. Downside could be limited in the near term while the Nikkei bounces a bit. Support may now be seen at 97.00. Eyes on the BOJ tomorrow and what they say about Yen strength.
The Aussie (0.9420) continues to be in a steep decline and has broken below crucial levels on the Monthly charts as well. Danger of decline towards 0.9229.
Dollar-Rupee had closed at a high 57.06 on Friday. Sentiment is bad. A test of the previous high near 57.3250 cannot be ruled out. But, equally, there can be some chances of a corrective fall towards 56.65 if the Rupee manages to remain below 57.3250. The R-currencies (Rand, Rouble, Real, Ringgitt) remain relatively weak only. Let us see what the Rupee does.
Bank of Japan tomorrow. Talk is about the BOJ extending maturity of stimulus to 2 years. The Japanese Yield Curve is all over the place recently, with the 5-Yr (0.28%) dipping while the 10-Yr (0.84%) rising and the 30-Yr (1.79%) rising as well. The 10-Yr has chances of moving up towards 1.00% unless the market is comforted in some manner by the BOJ.
The German-US 10-Yr Spread (-0.61%) has fallen back again lowering hopes of a meaningful rise past -0.55%. The 2-Yr Spread (-0.12%) is moving up well though and could Support the Euro a bit.
The Italian 10Yr (4.19%) and Spanish 10-Yr (4.55%) have been rising for some time, breaking through the downtrend that has been in force since July last year. The Spanish 10Yr needs to remain below 4.88% now to prevent any panic from hitting the market. Thankfully, the Spain-Germany 10-Yr (3.00%) remains in a downtrend for now.
The US 10-Yr (2.16%) has moved up again as the US NFP came in a +175K on Friday compared to an expectation of +165. Some Resistance can be seen near current levels. This needs to hold for a couple of weeks to keep the market calm.
23:50 GMT or 5:20 IST JP GDP
...Actual 1.0% ...Expected 0.90 % ...Previous 0.90 %
UK Trade Balance
...Actual -8.22 £ (Bln) ...Previous -9.18 £ (Bln)
...Actual 175 K ...Previous 149 K
US Unemployment Rate
...Actual 7.60 % ...Previous 7.5 %
CA Labour Force
...Actual 95.00 K ...Previous 12.50 K
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