Monday September 16, 2013 - 03:38:41 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 16-Sep-2013 -0336 GMT
Shanghai (2234, -0.12%) is consolidative, holding below long-term Trendline Resistance on Weekly Candles. This, despite the Larry Summers news and World Bank's confidence that China will achieve its 7.5% growth target.
But, other A-Pac indices are up a decent bit ranging between +0.59% (Australia) to +1.75% (Indonesia). Nothing like another liquidity rush to fix the Monday Morning Blues.
The Nifty (5850.60) is likely to honour Support at 5750 and could rise towards 6000. Whether it breaks above 6000 or not will be crucial. A rise past 6000 could be a game changer and could target 6250.
Dax (8509.42) and Dow (15376.06) had closed strong on Friday and may well rise further on the Summers news when the markets open later in the day.
Commodities are mixed today.
Gold (1330.60) has bounced from 1304.60 as the Dollar gets bashed. But it needs to rise past 1350 to break the current down trend. If so, it could move all the way up to 1425, even higher. Silver (22.19) is up a bit, trading near the resistance at 22.50. We may see prices coming down to 20-21 if the resistance holds. See overall sideways range of 21-24 for a few days.
Copper (3.2245) is up and has moved past the resistance at 3.22. There is another resistance coming in at 3.26-3.27. It can acquire fresh bullishness if it manages to remain above 3.20 this week.
Nymex WTI (107.43) and Brent (110.80) have both fallen as the Syrian issue seems headed towards resolution. Brent is trading just above the support levels near 111. We may see prices falling to 108 if the support breaks. Nymex is consolidating between 107-109. It is unsure as to whether Nymex will move up to 111 or down to 105-106 from here.
The Dollar dropped against the Euro (1.3367) as the former Treasury Secretary Lawrence Summers quit the race for the Federal Reserve Chairmanship. Janet Yellen is perceived to be a dove. The market expects low interest rates to continue if she replaces Bernanke. Euro is likely to consolidate for now ranging 1.32-1.34, but can move higher.
The Pound (1.595) has also risen, coming close to our target Resistance at 1.60. If this holds, we may see a push towards 1.57. Dollar-Yen (98.873) has fallen sharply on Dollar weakness. But, with Support at 98, there could still be some chances of the Yen weakening past 100 in the coming days.
Aussie (0.9337) is up and is expected to rise to 0.94 in the near term.
R-Currencies are stable for now. The Rupee (62.75) has opened stronger and can test 62.50, maybe 62.00 at the outside.
News that Larry Summers has withdrawn from race for US Fed Chairmanship. FOMC on Wednesday. Taper of $10-15 bln expected. Would be interesting to see the market's reaction in case the taper is lesser than anticipated.
Need to watch 2.85% on the US 10-Yr (currently 2.88%). Should that break, we could be looking at fall towards 2.80-75. "Risky" assets to get bought?
RBI Meeting on Friday. Raghuram Rajan expected to keep rates steady in his first meeting. In case he does the unexpected, Equities may feel a liquidity rush.
10:00 GMT or 15:30 IST EU CPI (YoY)
...Previous - 1.65 %
13:15 GMT or 18:45 IST US Industrial Production
...Previous - 0.00 %
13:15 GMT or 18:45 IST US Capacity Utilization
...Previous - 77.60 % -
6:30 GMT or 12:00 IST IN WPI
...Previous - 5.79 %
US PPI ex Food & Energy (MoM)
...Actual 0.00 % ...Previous 0.05 %
US Retail Sales
...Actual 0.20 % ...Previous 0.42 %
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