Tuesday October 22, 2013 - 03:53:58 GMT
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Morning Briefing : 22-Oct -2013 -0352 GMT
Mixed picture in Equities. The Occident is steady, maybe bullish. The Orient is steady, could be bearish.
Dow (15392.20, -7.45) remained stable waiting for the US NFP data today. The overall uptrend is intact targeting 15800-16000 from here. Nasdaq (3920.05, +5.77) is up marginally, on its way to test resistance at 4000 on the daily line chart. Dax (8867.22, +2.12) was also stable but continues to target 9000.
The Asia-Pac is mixed, though. Nikkei (14676.80) is testing resistance at current levels and could fall back to 14400 on profit-taking. Shanghai (2219) rose yesterday, but has crucial Resistance at 2250. It looks to be in two minds, on the edge of either a strong rise towards 2400 or a strong fall towards 2000.
Nifty (6204.95, +15.60) has closed above resistance near 6200 and could target 6250-6300.
Gold (1314.30) has dipped a bit. The resistance near 1325 is holding well. It can target 1275 if it does not bounce from here. Silver (22.12) has support from the 13-Week MA. If the support holds we may see it moving past the resistance near 23 as seen in the weekly line chart.
Copper (3.3) continues to move in a sideways range and has come up to a resistance on the weekly candles. This may push Copper down to 3.25
Nymex WTI (99.01) has fallen. It is in a near term downtrend and can target 96. Brent (109.73) has dipped. It can target 107-108 if it falls below 109. The Brent-WTI Spread (9) has been rising again since mid-September and could rise towards 11 also.
Euro (1.3663) has been steady waiting for the NFP data today. The overall picture suggests greater chances of a rise towards 1.3850-4000 before some serious profit-taking comes in. Dollar Index (79.69) still trades below the 200-week MA at 79.88.
Pound (1.6116) has fallen a bit as the resistance near 1.62 held well. After the recent uptrend it now seems to consolidate sideways in a broad 1.59-1.62 region. Dollar-Yen (98.3) has risen as the US-Japan 10-Yr Spread has moved up. Still, it is ranged well in the 97.00-99.5 region for now and may remain so in the coming weeks. Aussie (0.9646) remains in an overall uptrend, aiming to test the 200-day MA at 0.9750.
R-Currencies are stable except the Rupee (61.50) and the Ringgit (3.182) which have weakened a bit. Dollar Rupee (61.50) was stable yesterday. It may find Resistance in the 61.80-61.90 region today.
Slight uptick in yields of USA (10Yr 2.61%) and Germany (10Yr 1.85%), keeping the 10Yr Spread (-0.76%) steady. This can rise a bit to test strong Resistance near -0.67%, but might not break above that. The German-US 2Yr Spread (-0.13%) is trading in the middle of a -0.10% to -0.20% range, which can persist for some time. The European bond market situation continues to improve steadily with Spanish, Italian and Greek yields continuing to decline.
Contrary to our expectation, the US-Japan 10-Yr Spread (2.0%) has moved up from 1.96% yesterday, pulling Dollar-Yen up with it a bit.
With US September Existing Home Sales having fallen yesterday, the Fed is fully likely to commit to postponing tapering next week. We might expect it to change the mix of QE a bit by hiking the share of mortgage backed securities a bit vis-a-vis Treasuries.
Indian 10Yr GOI (8.60%) moved back up again from 8.55% earlier. We see it rising towards 8.75% in anticipation of a rate hike by the RBI next week. The Mibors are likely to steady around 9.5%, having come down from levels near 10.75-11.50% earlier.
12:30 GMT or 18:00 IST US NFP
...Expected 180 K ...Previous 169 K
12:30 GMT or 18:00 IST US Unemployment Rate
...Expected 7.3 % ...Previous 7.3 %
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