Tuesday September 24, 2013 - 03:37:54 GMT
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Morning Briefing : 24-Sep-2013 -0336 GM
Stocks fell in the U.S. and Europe amid concern about weakening bank earnings. Dow (15401.58, -0.32%) fell yesterday. There are further chances of a fall to 15200 and maybe lower. There is a lot of economic data this week - Consumer Confidence today, Durable Goods and New Home Sales tomorrow and GDP on Thursday - that will be closely watched, especially the New Home Sales yesterday. Nasdaq (3765.92, -0.25%) is down, consolidating between 3750-3850. The channel resistance at 3800 is holding. We may see a fall to 3700 before it rises again to 3850.
Dax (8635.29, -0.47%) has also seen some profit-taking. It is a little mixed, but could be vulnerable to a global dip in Equities. Chinese equities rallied yesterday after the good flash PMI, but the Shanghai (2189, -1.41%) is down heavily today. The Nikkei (14639, -0.70%) is also trading lower after yesterday's holiday. In fact, the whole of Asia-Pac is in the red, except for New Zealand which is up 0.18%.
Nifty (5889.75, -2.04%) fell sharply yesterday. The near-term Support at 5800 is likely to break, triggering a further a fall to 5700.
Gold (1326.90) has risen a bit but is consolidating sideways between 1300-1400 within an overall decline. Near term movememt uncertain. Resistance at 1375 is still holding well. Silver (21.89, +0.15%) trades similar to Gold. Sideways near-term within overall downtrend that could test 21. We could see a range of 21-23 for some days.
Copper (3.2855) has dipped on political shutdown in Washington over the US budget. Also the August Copper imports in China have dropped by 10%. Support coming up near 3.24 on the Daily.
Brent (108.00, -0.15%) and Nymex WTI (103.36, -0.22%) have both topped out well over the last few days and could be headed lower in the coming weeks. Brent can target 105 while Nymex could target much lower levels if immediate Support at 102 is broken.
The Euro (1.3492) has dipped against the dollar breaking support at 1.35. It may fall further towards 1.33-1.32 in the near term. Dollar Index (80.454) is stable for now and is likely to remain so for sometime. The Dollar remained low against the Yen (98.78) on news of budget shutdown.
Pound (1.6030) has climbed and is targeting resistance near 1.605 now. If this holds we may see a fall towards 1.59. Dollar Yen (98.78) has fallen but faces support at current levels on the 3-day candles. If this breaks we may see a fall towards 97, else a bounce towards 101 may be expected. Aussie (0.94102) is stable for now and has support at current levels.
R-Currencies are overall weak except the Brazilian Real. USD/BRL (2.2003) has been moving down and is targeting support near 2.18 from where it may bounce back towards 2.3. Dollar Rupee (62.60) trades high and may remain in the range of 62.5-63.00. The 1-month Forward NDF has risen to 63.29 from 63.17 yesterday.
The bright spot on interest rates is the fall in Spanish and Italian yields
US 10-Yr (2.70%) trades slightly lower. It has topped out for now and can target 2.60-2.50% in next few weeks. A bounce from current levels to 2.80% is a possibility though before the fall to 2.50% happens. The Curve Steepening mentioned yesterday is likely to continue with the US 30-10 Yr Spread (1.02%) showing signs of rising towards 1.20%.
The Indian 10-Yr (8.87%) saw a huge rise yesterday as an auction devolved. This has exceeded our anticipated range of 8.25-75%. The Indo-US 10-Yr Spread (6.17%) has risen past our target of 6.0-6.1%. The euphoria regarding Raghu Rajan's reign seems to be getting reined in. We need to see the impact of the SBI downgrade on the markets today.
Confidence in European recovery seems to be increasing. The Spanish 10-Yr (4.28%) is in a good downtrend now with good Resistance at 4.45%. Immediate target 4.10%. Support at 4.0%, though, just below that. The Spain-Germany 10-Yr (2.36%) has been declining since 3.27% (25-June) and should see levels below 2.25% soon. The Italian 10-Yr (4.25%) may also dip a little more towards 4.15%, if not lower.
13:00 GMT or 18:30 IST US Case Schiller
...Expected 12.50 % ...Previous 12.07 %
14:00 GMT or 19:30 IST US Cons Conf
...Expected 79.90 ...Previous 81.50
8:00 GMT or 13:30 IST GER IFO Business Climate
...Expected 108.40 ...Previous 107.50
8:00 GMT or 13:30 IST GER IFO Business Situations
...Expected 112.50 ...Previous 112.00
8:00 GMT or 13:30 IST GER IFO Business Expectations
...Expected 104.00 ...Previous 103.30
No major data release yesterday.
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