Friday December 13, 2013 - 03:42:24 GMT
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Morning Briefing : 13-Dec-2013 -0340 GMT
Dow (15739.43, -0.66%) fell below the support near 15800. With no near term support on the charts we can now expect it to target 15500. Nasdaq (3998.40, -0.14%) fell below 4000. It can now target the channel support near 3900 before rising back up to 4000.
Dax (9017.00, -0.66%) has dipped further. It is trading near our target of 9000. There are chances of a bounce from here as it is getting support from the 13 MA on the weekly. We may see it go up to 9200-300 if the support holds.
Nikkei (15402.21, +0.39%) has broken below the 21 Day MA. Failure to break above the MA we may see it coming down to 14900. Shanghai (2199.12, -0.17%) has dipped a dipped. But while in the support zone of 2200-175 a rise to 2250 can be expected.
Nifty (6237.05, -1.12%) fell below our target of 6250. A failure to recover from here can lead it to fall further to 6100.
Commodities are trading low on speculation that the FED will reduce stimulus as soon as next week.
Gold (1227.43) declined sharply and is trading near the trend support. As said earlier it is difficult to sustain the higher levels with bearish pressure coming in as Asiaís demand is likely to decline.
Silver (19.34) has also declined. It may target 18.8-18.1 levels on the downside.
Copper (3.2890) has remained stable with no major movement. While in the near term uptrend it targets 3.35-3.40.
Brent (108.70) is trading lower after a sharp fall yesterday from the 21-day Ma. We could see some consolidation directing a steady move downwards. Bearishness remains in the near term.
Nymex WTI (97.49) has remained stable and is trading above the 50-day MA. We could expect some consolidation in the coming few sessions while within the 96.8-98.8 region.
Fears of Fed Taper next week has led to Dollar strength all around. The Dollar Index (80.22) has recovered a bit after an unsustained dip below the 200-week MA (79.94)
Resistance at 1.3800-25 has held well on the Euro (1.3748) which is now vulnerable to a corrective fall to 1.3650 and lower by next week. Note, however, that the Euro is not looking weak against most of its Crosses. Dollar-Yen (103.55) shot up dramatically yesterday from the low of 102.15 on Wednesday and can rise further next week with Support at 103.00-102.80. The Euro-Yen Cross (142.39) has risen past 141.20, the 61.8% retracement of the fall from 169.92 (Jul-08) to 94.10 (Jul-12) and could rise further with Support at 141.20 now.
The Pound (1.6348) has dipped back this week after rising to 1.6465 but not attracting follow-through buying there. With EURGBP (0.8410) looking bullish on balance, the Pound may try to break below Support at 1.63 to target 1.62 next week. The Aussie (0.8941) saw a very sharp decline over the last couple of days. This has been a huge surprise for us. It is testing the 100-month MA (0.8945) again. Failure to bounce from here could be very bearish going into next month/ year. With the AUDJPY (92.61) being essentially ranged sideways, the Aussie may be vulnerable.
The Real (2.3340), Rand (10.39) and Rouble (32.80) are fairly stable. But, the Rupee (61.could weaken towards 62.25 given the lower IIP and higher CPI data released after market hours yesterday. Further, the slight weakness in the Euro also makest it vulnerable. We have to see if the RBI will come in to sell Dollars at the Opening itself to counter Rupee weakness.
The bipartisan passing of the US Budget deal and good Retail Sales is leading to talk of a taper as early as next week. Yet, the US 10Yr (2.87%) is slow in moving up towards the Resistance at 2.95%. At the moment we think it will hold but if it eventually breaks, the yield could be headed up towards 3.5% next year. The US Yield Curve as a whole has been flattening a bit over the last couple of weeks with the 30-10, 30-5 and 10-5 yield Spreads coming down. Take a look at
The 2Yr Swap Rate (3.74%) is not rising, however. We have to keep a watch on this variable now.
The German-US 2Yr Spread (-0.08%) has found Resistance near -0.06% so far, as expected, and could dip some more towards -0.15% as well. This could weaken the Euro towards 1.3650, if not 1.3600.
The high CPI (11.24%) in India yesterday together with a negative IIP (-1.8%) makes life very difficult for Raghu Rajan going into the RBI Meeting next week.
13:30 GMT or 19:00 IST US PPI ex Food & Energy (MoM)
...Expected 0.10 % ...Previous 0.16 %
Australia Labour Force
...Expected 10.30 K ...Previous -0.7 K ...Actual 21.0 K
...Expected < 0.25 % ...Previous < 0.25 % ...Actual < 0.25 %
EU IND Prodn (MoM)
...Expected 0.40 % ...Previous -0.20 % ...Actual -1.10%
EU IND Prodn (YoY)
...Expected 0.80 % ...Previous 0.30 % ...Actual -0.20%
...Previous 0.6 % ...Actual -1.8%
IN CPI (YoY )
...Previous 10.1 % ...Actual 11.24%
US Retail Sales
...Expected 0.20 % ...Previous 0.49 % ...Actual 0.41%
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