Thursday July 18, 2013 - 03:42:21 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 18-Jul-2013 -0339 GMT
The Dow (15470.52, +0.12%) is trading in a narrow sideways range. Support should be building up at 15400 for an eventual rise towards 15900. US Housing Starts was weak yesterday. The market will look for the Philly Fed index today and the Existing and New Home Sales figures next week.
Shanghai (2024, -0.98%) has disappointed today by falling sharply. But, there is hope of a rise while immediate Support at 2020 holds. That apart, the A-Pac indices are mixed, ranging from -0.98% (Shanghai) to +0.54% (Nikkei, 14694). The latter is up as the Support at 14400 mentioned yesterday is holding well.
The Nifty (5973.30) continues to look bullish to us as the Supports are holding well. We look for 6025-6075-6100 in the coming days.
Gold (1276.20) seems to have started its downtrend towards the 1200-1150 mark having made a high of 1299.70. We can expect it to reach the 1260-50 mark by the end of the week.
Silver (19.355) has come down significantly after making a high of 20.18. Looks bearish for now.
Copper (3.127) has strong resistance at the 3.19-20 and is finding it difficult to cross that mark. It has come down sharply from there but we expect it to end this week around the 3.18-20 levels.
Brent (108.45) has held very well to the support at 107.5. But it has also got resistance at the 109.00-50 levels. There is a bit of uncertainty as to where it'll go, but overall we look for a rise past 109.
The Euro (1.3110) failed to rise past 1.3170 yesterday but may still be bullish while above 1.3075. It can get some Support from Yields Spreads narrowing a bit in its favour (2-Yr Spread -0.21%, 10-Yr Spread -0.93%).
Dollar-Yen (99.77) has rallied well from the Support at 99.00 mentioned yesterday, avoiding a fall to 98.30. Chances of a rise towards 100.70 now. The Pound (1.5192) has risen well, in line with our expectation of a rise towards 1.5250.
The Aussie (0.9180) has fallen back after having risen to 0.9292 yesterday as Gold, Copper and Shanghai have retreated. While Gold could be bearish, we are hopeful of a rise in Copper and Shanghai again. Watch Support at 0.9160 on the Aussie. It can rise again while that holds.
Dollar-Rupee (59.3450) is quoting near 59.24 on the Offshore market on the dip in the US 10-Yr. Crucial level of 59.00 needs to break to allow for further gains in the Rupee.
The US 10-Yr (2.47%) is trading just below the crucial 2.50% on Bernanke's balm to the market that QE tapering is not a "pre-set" thing and is data dependent. PIMCO's El-Erian has called for a decline towards 2.20%. A dip below 2.45% will help in the near term.
The German-US Yield Spreads (mentioned in the currency section above) have narrowed a bit in favour of the Euro.
The Indian 10-Yr (8.11%) was down 2bp from 8.13% the day before. The Indo-US 10-Yr Spread (5.65%) has moved up a bit. This could help the Rupee a bit.
8:00 GMT or 13:30 IST EU EA (17) Curr Acct Bal
...Expected 20.00 EUR Bln ... Previous 19.50 EUR Bln
14:00 GMT or 19:30 IST US Philifed Index
...Expected 6.90 ...Previous 12.50
UK BOE Minutes
...Actual 0-0-9 % ...Previous 0-0-9 %
...Actual 7.80 % ... Previous 7.80 %
US Housing Starts (Mln)
...Actual 836 K ...Previous 928K
...Actual 1.00 % ...Previous 1.00 %
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