Friday September 13, 2013 - 03:45:36 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 13-Sep-2013 -0342 GMT
Some profit-taking being seen in Equities worldwide, in line with our suggestion over the last couple of days. Dow (15300.64, -25.96, -0.17%) and Nasdaq (3715.97, -9.04, -0.24%) are down slightly. In Asia, Shanghai (2242, -0.59%) and Nikkei (14342, -0.31%) are down a little more. As mentioned, there are long-term Resistances on the Weekly charts on the Nasdaq and Shanghai. And, of course, the market would be wanting to wind down positions ahead of the Taper FOMC next week.
Today's US Retail Sales will be important. Will it continue the recent soft data coming out of the USA? How will the market react to a combination of tighter liquidity and stalling growth in the USA? These are the things to be watched going forward.
India's IIP delivered a large positive surprise after hours yesterday. There could be a chance that the Nifty (5850.70) may try to buck the global trend and rise to test 6000.
We said yesterday that commodities show support at current levels and the prices may go up. But Gold, Silver and Copper have all fallen below the support levels. Gold (1326.90) and Silver (22.01) have fallen sharply below the support at 1360 and 22.50 respectively. This changes the picture and we may see a further fall in Gold and Silver to 1300 and 21 respectively.
Copper (3.2085) has also fallen below the support levels at 3.25. We see a support at 3.17-3.18 which may help push the prices back up to 3.25.
Nymex WTI (108.59) and Brent (112.76) both advanced for a second day ahead of talks between US and Russia to resolve the Syrian crisis. Brent has moved past earlier resistance at 112. We may see the prices going up to 114.
Currencies have dipped a little overnight, but are consolidative overall.
The Euro (1.3281) has fallen a bit against the Dollar and is likely to consolidate in the near term. Dollar Index (81.638) is finding it difficult to come down to 81 and may remain ranged for sometime now.
The Pound (1.5795, -0.08%) has fallen slightly but continues to remain in an uptrend for now with resistance coming up near 1.60 on the line charts. Dollar Yen (99.678) has risen a bit and is likely to move up past 100 in the coming weeks towards near term resistance near 103.
Aussie (0.9251, -0.23%) has dipped slightly. It is likely to consolidate a bit before rising eventually towards 0.94.
R-Currencies are stable for now. The Rupee (63.51) is likely to consolidate a bit before deciding its further move. While above 63 a rise to 64 may be seen. A break below 63 on the other hand leads to 62.50.
A taper of $10 bln next week is fully priced in. But, the US 10-Yr (2.93%) remains persistently high. A few are talking of as much as $20 bln. So, the market is bracing itself for some negative surprises.
After the FOMC, we have the RBI Meeting on Friday next week. Most people expect the Raghuram Rajan to maintain status quo in his first meeting. The markets will zoom in case he cuts rates now that the Rupee is slightly better.
9:00 GMT or 14:30 IST EU Trade Bal
...Expected 15.30 EUR Bln ...Previous 14.90 EUR Bln
12:30 GMT or 18:00 IST US PPI ex Food & Energy (MoM)
...Expected 0.10 % ...Previous 0.05 %
12:30 GMT or 18:00 IST US Retail Sales
...Expected 0.30 % ...Previous 0.15 %
Australia Labour Force
...Actual -10.8 K ... Previous -11.4 K
...Actual 2.60% ...Previous - -2.20 %
EU IND Prodn (MoM)
...Actual -1.50 % ...Previous 0.60 %
EU IND Prodn (YoY)
...Actual -2.66 % ...Previous -0.50 %
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