Tuesday October 1, 2013 - 03:29:15 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 01-Oct -2013 -0328 GMT
Uncertainty and vulnerability in stocks overall.
US stocks closed significantly lower (Dow 15129.67, -128.57, -0.84%) yesterday and could be headed towards 15000 unless there is still some last minute deal to avoid a shutdown. The Dax (8594.40, -67.11 -0.77%) also closed lower.
But, surprisingly, A-Pac is only mixed, maybe even a little positive. Yet, although the Nikkei (14526, +0.49%) is up, it may still be vulnerable to a deeper fall towards 14000. China and Hong Kong are closed for the rest of the week.
The Nifty (5735.30) closed below 5750 yesterday, but is trading higher in Singapore today, near 5804. A break below 5700 would target 5500. The charts do no inspire confidence
Commodities have fallen globally on concern over the US government shutdown.
Gold (1329.50, +0.19%) has fallen on speculation that any US shutdown which may start today would be short-lived. Resistance at 1350.9 is holding well for now. We may see it ranged in the 1300-1350 regions for some more time. Silver (21.77, +0.26%) continues to consolidate sideways and would test resistance near 22. Near term trend looks berish.
Copper (3.3270) is in a near term uptrend. It may rise towards mid term resistance near 3.37 before falling back towards 3.32.
Brent (108.01, -0.33%) has fallen and is in a near term down trend. It may fall further towards 107.85-107.70 in the coming weeks. Nymex WTI (101.95, -0.37%) has fallen on US concern as the shutdown news poses a threat to slow the economy and reduce demand for oil. Near term support coming up near 100.
Yen weakens, Euro and Pound strong.
Strong bounce back in Dollar-Yen (98.56) from a low of 97.50 yesterday. Reinforces the current ranged nature of the market. No one is willing to commit to a strong trend. Narrow range 97.80-99.50, wide range 97.00-100.25. The Euro (1.3520) seems to be building Support at 1.3480 and can make a stab at 1.36 on the upside. Whether it can rise credibly past 1.36 or not is unclear at the moment. The Euro-Yen (133.18) looks positive overall with good Support near 131.55, the level it has bounced from.
The Pound (1.6205) is rising past 1.62 and looks strong with chances of seeing 1.6350 on the upside. The Aussie (0.9328) is in an indecisive position, not knowing whether to go up or down in the near term. In the medium term, though, there should be greater chances of seeing a rise towards 0.95 if the Aussie is able to remain above 0.9280.
The Real (2.2153) and Rand (10.0451) gained yesterday from levels near 2.2635 and 10.1240 respectively. The Rupee (62.60) remains ranged between 62-63 for now. Today's direction may driven by what happens to the Nifty.
Yields seem to be headed down globally, following the lead of the US bond markets. The US 10-Yr (2.66%) has risen a bit since yesterday, not breaking below our primary target of 2.60% despite the fear of the government shutdown. Overall, though, the yields remain bearish at the moment and may target 2.50% while below 2.75%
Japan 10-Yr (0.69%) has remained stable for the last week it is ranged between 0.70%-0.68%. It has Support near current levels now and might stabilise for a bit now. The German 10-Yr (1.78%) is in a downtrend targeting 1.75%. The German-US 10-Yr Spread (-0.87%) is bearish. We may see it targeting -0.90%. The British 10-Yr (2.54%) has dipped sharply during the last week from 2.83%. A further dip below 2.50% and we may see it targeting 2.25%.
Indian GOI (8.83% on the 10-Yr) has risen from 8.74%, a range of 8.50%-8.90% can be seen.
23:20 GMT or 4:50 IST AU PMI
...Actual 51.7...Previous 46.40
23:30 GMT or 5:00 IST JP Unemp
...Expected 3.80 %...Previous 3.80 % ...Actual 4.1 %
23:50 GMT or 5:20 IST JP Tankan Large Manufacturers Index
...Expected 7 ...Previous 4 ...Actual 12
4:30 GMT or 10:00 IST RBA Meeting
...Expected 2.50 % ...Previous 2.50 %
4:30 GMT or 10:00 IST IN PMI
...Previous - 48.50 -
7:30 GMT or 13:00 IST CH PMI
...Expected 54.90 ...Previous 54.60
8:00 GMT or 13:30 IST EU PMI
...Expected 51.10 ...Previous 51.10
8:30 GMT or 14:00 IST UK PMI
...Expected 57.50 ...Previous 57.20
9:00 GMT or 14:30 IST EU Unemp
...Expected 12.10 % ...Previous 12.10 % -
14:00 GMT or 19:30 IST US Manufacturing ISM
...Expected 55.30 ...Previous 55.70
...Actual 52.5...Previous 52.2
...Actual 0.60% ...Previous - -0.50 %
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