Monday August 12, 2013 - 03:40:15 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 12-Aug-2013 -0337 GMT
Equities are down globally, apart from Shanghai.
The Dow (15425.51, -0.47%) dipped some more on Friday and may well fall further towards 15250. A fall towards 15000 cannot be ruled out either as the market prepares for possible "tapering" in September.
Nikkei (13604.10, -0.08%) has fallen on Yen strength, but is now testing crucial support at 13600. We may expect a bounce from here if the Support holds. Shanghai (2066.04, +0.67%) is trading further higher as better than expected Chinese data last week. This should be good news for the world as a whole. While support at 2025 holds we may expect a rise towards 2100.
Nifty (5565.65) had risen on Rupee strength on Thursday, bouncing from crucial Support at 5500. It needs to rise past 5650 to avoid the danger of a fresh fall. Support at 5500 needs to hold.
Commodities stronger all around.
Brent (108.17, -0.05%) bounced back on Friday from 106 seen on Thursday. The buying interest on the dip suggests chances of 110 again this week.
Gold (1328.90) has surprised by rising sharply past 1325. We may see a further rise towards 1350. Near term Resistance is coming up at 1350 and then at 1400. Silver (21.045) too is sharply up, having broken past 20.50. This is a big break higher and there are now chances of seeing a further rise towards 22.00.
Copper (3.3005) has done well to rise past 3.30. If it is able to sustain its gains, it can rise further.
Divergent trend in currencies. G-3 weaker. Aussie and EM currencies stronger.
Dollar Index (81.25) is bouncing a bit as the Support near 81.00 is holding on first testing. We see decent chances of a fresh rise towards 84.00 in the coming weeks as the overall sideways range continues.
The Euro (1.3321) has come off from 1.34, but may have Support at 1.33 today. The Pound (1.5495) is seeing some profit-taking from the high near 1.5574 seen last week and could dip to 1.54 while below 1.5550. Dollar-Yen (96.59) has been finding Support at 96.00 over the last three days and may rise to 97.00+ if it sustains above 96.50-25. An eventual rise towards 97.50 could also be possible.
Unlike the G-3 currencies, the Aussie (0.9205) continues to see massive short-covering. It has broken its downtrend since 1.0582 (11-Apr) and may well target 0.9275-9300. Even the R-currencies have gained a bit against the Dollar late last week and could see some more strength today. The Indian Rupee (60.8850) may also gain towards 60.75-50, maybe even 60.25 this week.
The US 10-Yr (2.58%) has dipped below 2.60% after a long time. There is a lot of data this week (Retail Sales, PPI, Industrial Production, Housing Starts) that will keep the market occupied with its "Will the Fed taper/ won't it taper" game. There could be chances of seeing 2.50% on the downside during the rest of this month.
The German-US 2-Yr (-0.14%) trades near crucial Resistance. The German-US 10-Yr Spread (-0.89%) could rise some more towards Resistance near -0.85% but may start falling again from there.
Indian interest rates could rise as the RBI tightens liquidity further.
23:50 GMT or 5:20 IST JP GDP
...Actual 0.6% ...Previous 1.0 %
4:30 GMT or 10:00 IST IN IIP
...Previous -1.60 %
...Actual <0.10 % ...Previous <0.10%
UK Trade Balance
...Actual -8.1 £ (Bln) ...Previous -8.67 £ (Bln)
CA Labour Force
...Actual -39.40 K ... Previous -0.40 K
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