Friday June 28, 2013 - 03:45:09 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 28-Jun-2013 -0342 GMT
Equities stabilising/ moving up. Worst seems to be over, at least for now. The Fed officials have been talking down the US yields, trying to calm the markets.
Dow (15024.49, +114.35, +0.77%) is up, a wee bit above 15000, in line with expectation yesterday. Encouraging, but likley to consolidate sideways between 14600-15200 for a week or so.
All of Asia-Pac, including Shanghai (1966, +0.80%), is up. The Shanghai is close to the end of its long-term downtrend since July 2009 and Support at 1850 is likely to hold. A rise past 2000 is needed to confirm that the downmove is over. The Nikkei (13636, +3.20%) is up strongly. The "rounding bottom" on the Daily Candles suggests a rise towards 14000 next week. That can negate our earlier bearish target of 11750.
Hope to see the Nifty (5682.35) move up further today. A rise past 5700 will reduce the bearishness in the market. A rise past 5800 is likely to pull Bulls back in.
No time to be Long on precious metals. Industrial commodities showing hopeful signs of doing better. Good for global growth?
Gold (1203) has crashed below 1225, our earlier target. No short-covering bounce seen so far. The market seems to be in a liquidation mode now and Longs will be hurting very badly. Look for a target of 1075 on th e longer term charts. Silver (18.92) faring a little better than Gold but unable to rise to 20 while Gold crumbles. Break below 18, if seen, brings up a target of 17.00-16.50.
Copper (3.0495) holding up above the crucial Support at 3.00. But needs to rise past 3.10 to ensure that a bottom is in place. Has some chances of being able to rise. If so, it could signal an important turnaround for the world, wherein Gold will fall against Copper. Watch this one.
Brent (103.01) is attempting to move onto a higher plane. The market is likely to trace out a consolidative bottom between 100-106 over a few weeks before moving higher. A rise past 107 is needed to confirm.
Dollar Index (82.85) still bullish, on its way to test 84 within overall 84-81 range.
Euro (1.3070) is up a bit over the last 2 days, but can still fall to 1.29 before the downmove from 1.3416 (18-Jun) can be said to be over. The Pound (1.5272) had fallen to a low of 1.5200 yesterday. Could be in danger of falling towards 1.5070. Dollar-Yen (98.83) continues to rise towards 100, in line with expectation.
Surprisingly, the Aussie (0.9255) has dipped again despite the resilience in Copper and Crude. It has been unable to rise towards 0.9400. Watch 0.9148 (previous low earlier this week) as the crucial Support now. This needs to hold to prevent a deeper decline. Our preference is for a recovery/ bounce. Watch this one. It could be crucial.
The Rupee (60.19) is seen as trading near 60.11 on the NDF market. The EM and R currencies have strengthened this week, but their gains could be limited a bit now. However, the fall in the US Yields yesterday could help them gain.
The fall in the US 10-Yr (2.47%) is a very encouraging sign for "risky" markets. Bill Gross of PIMCO has called for 2.20% on the 10-Yr. He may well be correct, but a last dash up to test 2.75% cannot be ruled out yet. The market, although hopeful of quieter conditions ahead (especially given the Fed officials attempts to calm the markets) might also want to be careful before the US NFP data next Friday.
23:01 GMT or 4:31 IST UK Cons Conf
...Expected -21 ...Previous -22
23:15 GMT or 4:45 IST JP PMI
23:30 GMT or 5:00 IST JP Unemp
...Expected 4.00 % ...Previous 4.10 %
5:30 GMT or 11:00 IST IN BoP
...Previous -32.60 $ Bln
12:30 GMT or 18:00 IST CA GDP
...Expected 0.00 % ...Previous 0.20 %
...Actual 0.30 % ...Previous 0.30 %
EU Biz Climate
...Actual 91.3 ...Previous 89.4
US Personal Income
...Actual 0.51 % ...Previous 0.13 %
US PCE Price Index M/M
...Actual 0.26 % ...Previous -0.35 %
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