Wednesday July 17, 2013 - 03:36:54 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 17-Jul-2013 -0334 GMT
Slightly mixed/ divergent moves among global indices.
The Dow (15451.85, -0.21%) was down marginally yesterday. It has been quiet for the last 3 days. The potential for a rise to 15900 is still there, provided a rise past 15500 is seen. Crucial Support at 15400. US Industrial Production rose, Capacity Utilisation was stagnant and CPI was muted.
Asia-Pac indices are mixed but mostly in the green. The Shanghai (2072, +0.31%) is up again. We look for a rise towards 2125. There is a 50% chance that the worst is over for the Shanghai. The Nikkei (14487, -0.77%) trades lower on a relatively stronger Yen (99.40). It has a crucial Support at 14400, but that could be vulnerable to a break and a fall towards 14000. Watch this one.
The Nifty (5955.25) closed lower yesterday on the RBI's liquidity tightening measures, but has managed to remain above crucial Support at 5900. We can see a huge rise now based on the Government's FDI decisions yesterday. We look for 6100.
Gold (Spot 1291) is approaching strong Resistance at 1300 which can push it down again within its overall downtrend. Silver (19.96) may already have found Resistance at 20. Else there may be some more room on the upside to 21.
Brent Crude (107.87) is down sharply over the last couple of days, hesistating before mounting an attack on 110. Support seen at 107.50. WTI Crude (105.77) is also seeing profit-taking after its long climb from 97. Support seen at 104. Further rise possible while that holds.
Copper (3.1835) is looking increasingly bullish for a rise towards 3.25, even 3.30.
The Euro (1.3141) is bullish for 1.33 as mentioned yesterday. The Pound (1.5155) is consolidating between 1.5045-5170 and has chances of rising towards 1.5250. Dollar-Yen (99.39) is trading lower from yesterday, but is finding some Support at 99.00. There is a danger of a dip towards 98.30-20 which is a super-crucial Support from a long-term perspective.
The Aussie (0.9235) deserves credit for managing to break above 0.92. This might trigger more Short-covering. Target 0.9315.
Dollar-Rupee (59.3150) may try to break below 59.00 if the stock market rises strongly on the government's FDI proposals.
The US 10-Yr (2.54%) has Support at 2.50% in the near term and could see a rise towards 2.60% if and while that holds. That could lead to some strength for the Dollar if it happens.
The German-US 2-Yr Spread (-0.23%) is in the process of moving higher having found Support at -0.30% earlier. A rise past -0.20% would be helpful.
Hopefully Dollar-Rupee Forward Premium will stabilise after the sharp rise yesterday. The 6-mth (7.46%) could dip to 7.25%.
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 %
12:30 GMT or 18:00 IST US Housing Starts (Mln)
...Expected 950 K ...Previous 914K
13:00 GMT or 18:30 IST BOC Meeting
...Expected 1.00 % ...Previous 1.00 %
UK CPI Y/Y
...Actual 2.90 % ...Previous 2.70%
EU Trade Bal
...Actual 15.20 EUR Bln ...Previous 14.10 EUR Bln
EU CPI (YoY)
...Actual 1.67 % ...Previous 1.48 %
US Core CPI (MoM)
...Actual 0.08 % ...Previous 0.25 %
US TICS (Net foreign purch of long-term Sec)
...Actual -27.16 $ Bln ...Previous -21.82 $ Bln
US Industrial Production
...Actual 0.41 % ...Previous -0.10 %
US Capacity Utilization
...Actual 77.80 % ...Previous 77.70 %
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