Monday December 9, 2013 - 03:35:33 GMT
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Morning Briefing : 09-Dec-2013 -0334 GMT
The Dow (16020.20, +1.26%) rallied hard to make the up for the loss incurred in the previous 3 sessions after holding on to the major support of 15800 in line with our expectation. It stays on course for the targets of 16100-200 as mentioned before. Nasdaq (4062.52, +0.73%) rallied close to a new year high after crossing the highs of the last 4 days. Staying above 4040, it is expected to reach 4100 levels this week.
The Dax (9172.41, +0.96%) bounced a bit but still has to manage the challenge of the strong resistance zone of 9250-90. The Dax bulls are yet to be confident unlike the US markets. Support comes at 9050.
Asia-Pac is mixed. Nikkei (15583.46, +1.85%) is testing the supply zone of 15600 after opening with a huge gap up. It has hold on to this opening gap and sustain above 15600 to reach a new high. Shanghai (2235.53,-0.07%) has come off and is within the crucial 2235-45 level. It needs to ensure a sustained move above these levels to rise further else it may be forced downwards to 2200.
Nifty (6259.90, +0.30%) is expected to open with a huge gap today and make a new life time high on the back of the euphoria over the good results by BJP in the Assembly elections. If today this index manages to close above 6370-6400, the trend may be decisively bullish to reach further. We will keep an eye if any kind of selling pressure comes or not after the initial euphoric move.
Gold (1229.91) is consolidating in the 1245-1211 region and can rise towards 1290 if it breaks above 1250. Silver (19.528) is stable, moving sideways. It has some chances of seeing a small rally to test the long-term Resistance near 21.50.
Copper (3.2380) is stable with no major movement and may continue to be ranged between 3.28-15 for a few more days. The wider sideways range is 3.10-3.40.
Brent (111.68) continues to rise in its uptrend from levels near 103. If it makes a sustainable break above 112-112.5 we could see a rise towards 116. Nymex WTI (97.83) traded high on news that Chinaís Crude imports rose in November signaling recovery in oil consumption. The 13-day and 21-day MA support near 93.65-93.90 still holds well and while above these levels we could now expect some steady rise towards 102+.
Euro (1.3710) remains strong and can rise to 1.3800 before running into profit-taking. Dollar-Yen (102.95) has risen well above 102 again after the profit-taking fall to 101.62 last week. The overall trend remains bullish. The Euro-Yen (141.14) is testing the 61.8% retracement of the 4-year decline from 169.90 (Jul-08) to 94.10 (Jul-12). Expect profit-taking between current levels and 143.15.
The Pound (1.6343) is hesitating just below the crucial multi-year trend Resistance near 1.64. With EURGBP (0.8388) having bounced from 0.8252, it might be difficult for the Pound to break above 1.64 easily. Expect consolidation/ profit-taking. The Aussie (0.9121) has potential for a strong rise if it manages to remain above 0.9030-00. A test of 0.9185 is possible in the near term.
The Brazilian Real (2.3405) and the South African Rand (10.3120) have recovered a bit after weakening last week and could strengthen this week. We see good chances of Dollar-Rupee opening gap-down near 61.20-61.00 on the BJP-positive election results yesterday.
The US 10Yr (2.86%) remained stable after the NFP Data on Friday and is now targeting the Resistance near 3.00%. The market is divided between expectations of a December taper or later. We see decent chances that the yield will not rise past 3.00% and will possibly soften from there.
The German 10Yr (1.84%) looks likely to rise overall alongwith the US 10Yr. The German-US 10Yr Spread (-1.02%) has moved up a bit. The German-US 2Yr Spread (-0.09%) has been moving up well, aiding the Euro's strength. The Japanese 10Yr (0.66%) has risen slightly but not much. The US-Japan 10Y spread has come up to 2.19% and is tracking well the rise in Dollar-Yen. Take a look at http://www.kshitij.com/graphgallery/usdjpydiff.shtml#usdjpy
The Indian 10Yr (8.85%) saw a sharp rise ahead of the state election results, but could come off a bit alongwith expected Rupee strength.
23:50 GMT or 5:20 IST JP GDP
...Expected 0.40% ...Previous 0.50% ...Actual 0.30%
10:00 GMT or 15:30 IST EU EA (17) Curr Acct Bal
...Previous - 17.70 EUR Bln
...Expected 184 K ...Previous 200 K ...Actual 203K
US Unemployment Rate
...Expected 7.2 % ...Previous 7.3 % ...Actual 7.0%
US Personal Income
...Expected 0.30 % ...Previous 0.45 % ...Actual -0.08%
US PCE Price Index M/M
...Expected 0.40 % ...Previous 0.21 % ...Actual 0.28%
CA Labour Force
...Expected 12.00 K ...Previous 13.20 K ...Actual 21.60K
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