Wednesday October 23, 2013 - 03:39:40 GMT
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Morning Briefing : 23-Oct -2013 -0337 GMT
Equities are up globally. Modern Economics: Bad US NFP = Strong Equities.
Dow (15467.66, +75.46) has risen further targeting 15800. Nasdaq (3929.57, +9.52) is up. It is in a near term uptrend and is targeting the resistance at 4000. Dax (8947.46, +80.24) is up and can now target 9100-9200.
Nikkei (14741.28, +28.03) is up but has Resistance near 14800. The fall in Dollar-Yen could pull the Nikkei down and it can target 14400 if the Resistance holds. Shanghai (2220.82, +10.17) is up. Moving sideways for now. Whether it rises to 2400 to falls to 2000 is still unsure.
Nifty (6202.80, -2.15) has remained stable throughout yesterday. It can target 6300 but there may be chances of a fall to 6100-6000. A quiet day today could be a sign of weakness. Let's see.
Gold (1340.60) has risen on the fall in the Dollar. It has a Double Bottom and can now target 1375-1425. Silver (22.75) is holding above support at the 13-Week MA. Athough it has Resistance near 23, the falling Gold-Silver ratio suggests Silver could move higher towards 24.
Copper (3.3255) saw a high of 3.355 yesterday. We may now see it targeting 3.40 if it moves past the resistance near 3.375.
Nymex WTI (98.13) has dipped even further as there is an increase in Crude stockpiles in the US. It can target 96. Brent (109.91) has remained stable. We see it moving in a sideways range for a few days The Brent-WTI spread has come up to 11.78. We may see the spread widening to 13 if the WTI prices keep falling.
Euro (1.3789) shot up after the much lower than expected NFP data yesterday. It may now test 1.3980-1.4000 levels in the near term. Dollar Index (79.190) has fallen after the NFP data and may decline further towards 78.90-60.
Pound (1.6247) has risen and may target 1.63-1.64 in the near term. Dollar Yen (97.89) has come off from 98.47 and may continue to move within the 97-99.5 region in the near term. The Aussie (0.9741) has met our target at the 200-day MA near 0.97 but might see some profit taking now between current levels and 0.978.
R-Currencies are overall stable in a sideways movement. Dollar-Rupee (61.65) dipped a bit yesterday coming off from the 61.80-90 region. The Rupee may strengthen some more towards on overall Dollar weakness.
Strong dip in the US 10Yr (2.50%) after the bad US NFP data yesterday. Charts suggest further decline towards 2.25% in coming weeks. The US-Japan 10Yr spread (1.89%) has fallen sharply also from 2.0% yesterday. So has the German-US 10Yr Spread (-0.71%) has also reduced. As a result, the Dollar has lost against the Euro (1.3789) and the Yen (97.97).
The German-US Spread (-0.71%) can rise some more towards -0.63% where it faces a strong Resistance and could come off sharply from there. But, as mentioned earlier, the US-Japan 10Yr spread (1.89%) has made a medium term Top and could dip a little more towards 1.80%-1.78%.
We suspect the Fed might increase share of MBS (mortgage backed securities) purchase in its policy meeting next week.
The 10Yr GOI (8.61%) trades well above 8.50% and may remain elevated ahead of the RBI Meeting next week. Might we expect some more announcements regarding the Rupee market from Raghu Rajan? Watch for that.
1:30 GMT or 7:00 IST AU CPI
...Expected 0.80 % ...Previous 0.40 % ...Actual 1.2%
8:30 GMT or 14:00 IST UK BOE Minutes
...Expected 0-0-9 % ...Previous 0-0-9 %
13:00 GMT or 18:30 IST BOC Meeting
...Expected 1.00 % ...Previous 1.00 %
...Actual 148 K ...Previous 193 K
US Unemployment Rate
...Actual 7.20 % ...Previous 7.3 %
US TICS (Net foreign purch of long-term Sec)
...Actual-8.92 $ Bln ...Previous 30.95 $ Bln
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