Friday October 11, 2013 - 03:38:46 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 11-Oct -2013 -0333 GMT
Strong bounce in the Dow (15126.07, +323.09, +2.18%) on short-covering prompted by news of some compromise being worked out in Washington. The Support at 14719 has held well and the Bear SHS we were looking at yesterday might have been negated. If so, the Dow could move up to 15500 in the next couple of weeks.
But, the after-market news is that Obama has rejected the Republicans' offer of a short-term debt ceiling hike. Maybe the market will interpret it as finally some or the other talks happening. As it is, the Republicans are preceived to have painted themselves into a corner.
All of Asia-Pac is up strongly, ranging from +0.50% (Singapore) to +1.59% (Australia). The Nikkei (14381, +1.31%) could test the recent highe near 14800. The Shanghai (2215) has also been moving up from Support at 2175 over the last few days and is likely to test 2240-45.
The Nifty (6020.95) could move past 6050 in this benign background, especially if the Infosys results are good. Target 6200 in that case.
Gold (1289.50) has fallen further breaking below 1300. The target of 1275 we said yesterday looks possible. It may even target 1225. But it has a support at 1225 on the weekly line chart which may help it to bounce back to 1300. Silver (21.71) is consolidating sideways. It is now testing support near 21.50. We may see it bouncing back to 23 from here.
Copper (3.26) rose for a second day. It may rise further to test the resistance at 3.275.
Nymex WTI (102.74) has been consolidating sideways between 101-105 for the last 3 weeks. It can move either way now. Brent (111.55) has bounced moving past 110. We may see it targeting 114 while above 111.
Euro (1.3537) has risen after the recent sharp fall, bouncing from the 21-day MA. Could head higher. The Pound (1.5983) has also strengthened, coming up from trend Support at 1.5900. Near-term resistance coming up near 1.6040. Could be bullish if that breaks. Dollar Index (80.45) has dipped a bit but overall remains stable. It may consolidate sideways for some time now.
Dollar Yen (98.496) has risen strongly this week and can well test 99 now. Above that even 100.45 may be possible. Aussie (0.94783) is moving well with the near term uptrend targeting 0.95 in the near term.
R-Currencies have strengthened sharply. Dollar Rupee (61.39) had fallen sharply yesterday and may well see 60.80-40 today.
BOE left QE and bankrate unchanged at GBP 375 bln and 0.5% respectively yesterday.
Near-term US TBills spiked to 0.50% yesterday, but the Bond yields continue to be relatively calm. Obama has rejected a 6-week debt ceiling "extension" by the Republicans.
The Indian 10-Yr (8.49%) dipped below the 8.50% we were thinking would hold as Support.
12:00 GMT or 17:30 IST IN IIP
...Previous - 2.60 %
12:30 GMT or 18:00 IST US PPI ex Food & Energy (MoM)
...Expected 0.10 % ...Previous 0.00 %
12:30 GMT or 18:00 IST US Retail Sales
...Expected 0.68 % ...Previous 0.20 %
12:30 GMT or 18:00 IST CA Labour Force
...Expected 15.30 K ...Previous 59.20 K
Australia Labour Force
...Actual 9.1K ...Previous -10.20 K
...Actual 0.50 % ...Previous 0.50 %
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