Thursday August 29, 2013 - 03:37:15 GMT
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Morning Briefing : 29-Aug-2013 -0335 GMT
The Dow (14824.51, +48.38, +0.33%) managed to close marginally higher after the sharp fall the day before. But, there is still danger of further decline towards 14000. Today's US GDP data is expected to come in at +2.3%. In case the number is lower, the market may choose to interpret it either way - either suggesting dip in Yields and therefore bullish or suggestive of slowing growth and hence bearish. Better to be on guard.
The DAX (8157.90) fell sharply yesterday and can test important Support at 8000. Could bounce from there.
The Asia-Pac are mostly in the green as well, ranging from -0.26% (Australia) to +1.22% (South Korea). The Nikkei (13421, +0.6%) and Shanghai (2105, +0.2%) are up a bit. Its good that the Shanghai is holding above 2075, but needs to break above 2125 to move up further. Failure to rise past 2125 could push it down. The Nikkei too is holding above 13200, which is good. But further gains past 13600 are needed to prevent a meltdown later.
The Nifty (5285) bounced from a low of 5118.85 yesterday, but like the others above, it needs to rise past 5400 to ease the current fears in the market.
Gold (1410.30) has dipped a little since yesterday. A near term support can be seen at 1400. If it holds we may still see the prices going up to 425-1450. Silver (24.25) is also down. Resistance at 25 can push the prices a little more towards 23.
Copper (3.2940) has fallen below 3.30. Last Support for Copper would be 3.25. The hoped for rise to 3.45-3.50 can be ruled out if it doesn’t rebound from here.
Nymex WTI (109.37) rose to our initial target of 112 and has come off a bit from ther. Brent (115.84) has cooled a bit after rising into the 117-118 region yesterday as expected. Some consolidation is likely in Crude now while the market decides whether it wants to rise further or not. The Syrian situation is likely to be the trigger, of course.
The Major currencies are consolidative.
Euro (1.3327) continues to consolidate between 1.33-34. It needs to break past the crucial resistance at 1.34 to rise further. The Dollar Index (81.479) still trades above the support at 81.00 before the US GDP data today. The Pound (1.5532) fell to a low near 1.5427 yesterday, but has come back above 1.55. The picture is unclear. On balance, the bounce from 1.5427 yesterday may suggest that the correction in Pound is over.
Dollar Yen (97.57) is caught between crucial Resistance at 98-99 and crucial support at 96. The near term outlook is unclear/ ranged. The Aussie (0.8966) fell to a low of 0.8893 yesterday and could be vulnerable to further decline unless there is a sharp bounce really soon. Note that it has not been able to benefit from the rise in Gold.
The Rupee (68.825) hit a record low yesterday. It could strengthen a bit towards 68 today if the currency swap window announced by the RBI for the Oil companies has the desired effect. The R-currencies including the Rand (10.3133) and the Brazilian Real (2.3452) have strengthened overnight. This too could help the Rupee a bit.
US 10-Yr (2.77%) is up compared to 2.73% the day before. The market will watch the US GDP data keenly today. See the Equity section above for interpretation.
The Japanese 10-Yr (0.72%) is falling. A support at 0.65% is seen which may help it to bounce back. The US-Japan 10-Yr Spread (2.05%) could be bouncing from 2.0%. If so, it could lead Dollar-Yen higher eventually.
The Indian 10-Yr (8.95%) rose on Rupee depreciation yesterday, and can see a volatile range of 8.75-9.25% in the days ahead. It could dip a bit today on the RBI's currency swap window for the Oil companies.
12:30 GMT or 18:00 IST US GDP
...Expected 2.30 % ...Previous 1.70 %
No major data release yesterday.
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