Tuesday December 30, 2014 - 03:36:46 GMT
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Morning Briefing : 30-Dec-2014 -0335 GMT
HAPPY NEW YEAR!!
As the year ends Dollar Index finds itself at the highs and many currencies and commodities at its year lows. This and the trend in the yearly quarterly charts broadly suggest the direction of the larger trend in the New Year. Volumes are likely to remain low in this week as well.
Dow (18,053.71, +0.13%) ended flat in a rather volatile but range bound trading session. The larger trends will be clearer only in next week.
Nikkei (17,610.13, -0.68%) is trading flat ahead of holidays, with last day profit booking taking toll on index. It is expected to remain flat until next week.
Shanghai (3,176.94, +0.27%) ends the year at the new highs, and this would signal further bullishness into the New Year. The larger term trend is bullish and any medium term dips should be used to add positions. The short term trend is likely to be flat. We are unlikely to see the higher targets happening this week.
The undercurrent in Dax (9,927.19, +0.05%) is especially bullish, though the new scenario emerging from Greek situation and its repercussions carry risk.
Nifty (8,246.30, +0.56%) the volumes have remained low. It is unlikely to break out above its immediate resistances of 8300 until next week. The supports of 8,200 are also likely to hold until next week.
Gold (1186.61) has been fluctuating for sometime now below 1200. While the resistance near 1237 holds the metal may remain choppy. We may see a retest of 1237 levels going into early Jan'15.
Silver (15.85) has continued to trade below 17.29 for a couple of weeks now and is ranged sideways. It may range in the 15.5-16.25 in the near term.
Nymex (53.71) and Brent(58.03) have fallen a bit more extending the long term fall. This may continue for a few weeks in the beginning of 2015 but we may soon see the Crude bottoming in the near term. Immediate target for WTI is 50 while that for Brent is 55.93.
Copper (2.84) saw a low of 2.794 but bounced sharply from there. Overall the downtrend persists. We may see a break of 2.80 in the near term which may take it lower to 2.75 levels.
Though the volumes have been low the day for 2014 settlement saw some wild swings.
Euro (1.2136) fell hard and with Dollar Index (90.26) making another new high. Euro closing at the lows as the year ends signals continued bearishness in next year. There aren't much short term supports except the larger term support at 121.00, which is expected to hold going into holidays.
Pound-Dollar's (1.5512) fell back from the range-resistances to 1.5500 levels. Some support was offered by EURGBP (0.7822) which continues to hinge on the edge of precipice. Critical supports of 0.7750 and 0.7800 are back in play.
Dollar-Yen (120.46) is largely unchanged and below the key resistances. Though, the larger trend remains bullish, a break above 121.00 is required to negate bearish possibilities.
Dollar-RUPEE (63.66) is trading quiet and the larger range of 63.10-63.90 is likely to hold for couple of days. The volumes are likely to be low for this week as well.
Aussie-Dollar (0.8125) is largely trading in a range 0.8150 and 0.8100.
Greek bond yields rose sharply yesterday after the parliamentary election results. The Greek 10Yr (9.561%) and 30 Yr (8.448%) rose sharply from 8.358% and 7.932% respectively. The peripheral yield has risen with Portugal 10yr moving up to 2.75% from 2.71% yesterday.
The AAA countries saw continued firming up of the yields. The German 10Yr (0.547%) is also low from 0.5875%. Yields for French bonds were 10 Yr (0.831%), 5Y (0.172%); and Holland 10Yr 0.68%. The Italian (10Yr, 1.9725%) and the Spanish yields (10yr, 1.6775) have fallen sharply.
The UK gilts also fell along with the Germany yields. The UK 5Yr (1.22%) and 10Yr (1.823%) have fallen from 1.280% and 1.880% respectively.
But the negatives seem to have been factored in by the Euro (1.2114) which remained quite stable yesterday. The run in the sovereign bonds seems to indicate a near certainty of selective ECB bond-buying program. Though, the scenario is still murky as to how ECB and IMF would treat the fresh volte-face by Greece.
The US Treasury yields fell with the 10Yr (2.19%) falling the most from 2.24% on Greece political turmoil.
The Indian 10Yr GOI (7.9277%) has remained stable for a few sessions, ranged in the 7.90-7.95% region. We may see some stability for a couple of sessions more while Rupee remains stable.
14:00 GMT or 19:30 IST US Case Schiller
...Expected 4.4 % ...Previous 4.9 %
15:00 GMT or 20:30 IST US Cons Conf
...Expected 94.6 ...Previous 88.70
No major data release yesterday.
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