Market Morning Briefing


Most of Asia-Pac is down today on profit-taking after the dip in the Dow over the last two days. Shanghai (1979, -0.60%) has come down to the 1980 Support region mentioned yesterday. It is imperative that there be a bounce from here, else it could signify worsening of the Chinese situation. That would be a major drag for the world.

The Dow (12878.13, - 0.69%) has come off on profit-taking, attributed to concerns about the fiscal cliff. We see this as normal market give-and-take. The important thing is the Dow bounced from 12500 a couple of weeks ago. It could find buyers near 12700.

The Nifty (5727.45) staged a strong rise yesterday on news of a stable outlook given by Moody's. But, it might not be able to break past 5750-60, given that most Equity markets are seeing profit-taking. The markets are closed today on account of Guru Nanak Jayanti.

Crude remains flat/soft, Gold has also dipped but has supports at current levels and also at lower levels, Silver is also a bit soft.

Nymex Crude (87.12, -0.07%) softened just a bit over US Budget talks and Fiscal Cliff worries. Technically it continues to trade in the 89-84 range, while above 87.00 a rise to the upper end of the range is possible.

Brent (109.90, +0.03%) took resistance near 112.00 to dip lower as it continues to trade in the 118-105 range.

Gold (1741.10, -0.07%) has also dipped a bit but has support near current levels and also near 1735-30 levels from where we are likely to see a bounce. The bullish SHS pattern still holds and targets 1800. The bigger picture remains bullish.

Silver (33.94, -0.11%) is also a bit soft as it has come off. It can still rise towards 35.50 if 34.50 is broken. But the daily candle is indecisive hence the immediate term also becomes bit mixed. The bigger 35.50-26 range continues to hold.

Copper (3.52, -0.23%) is trading in its 3.56-40 range on the daily charts. The longer term remains positive for a rise to 3.70.

The Dollar Index (80.35) has bonced back yesterday but has significant Resistance near currrent levels in 80.40-50 region which we expect to hold and a pull back is possible.

The Euro (1.2930) has failed to rise past 1.3000 once again. The overall picture is still bullish, but a dip to 1.2900-850 is possible before a break and rise above 1.3030 towards 1.3100-200. Dollar-Yen (81.81) has dipped below 82. This corrective fall can extend 81.50 or even 81 after which a fresh leg of upmove to 83-84 can be seen. The Euro-Yen Cross (105.81) is continuing to get Resistance in 107.00-25 region and can fall to 105-104.50.

Dollar-Swiss (0.9310) is retaining its 0.9200-500 sideways range and can rise further to 0.9380-400 in the coming days. and then a pull back to 0.9300-280 can be seen. Cable (1.6010) is not gaining strength and can fall back to 1.5950-00 or may be even lower. The downtrend since September remains intact. Aussie (1.0445) has come off from its high of 1.0489 and can test 1.0400-380 on the downside. A close below 1.0400 could be bad and can drag it down to 1.0300.

In Asia, the USD-SGD (1.2230) is trading in a narrow range of 1.2195-2235 and the overall view remains bearish for a strong break and fall below 1.2200 towards 1.2100-2000. Dollar-Rupee had closed lower at 55.45/46 yesterday. The Indian markets are closed today on account of "Guru Nanak Jayanti" holiday.

The Spain-Germany 10-Yr (4.08%) has fallen on the news that the next tranche of the Greek bailout loan has been cleared. However, we remind that Europe and the world are not out of the woods until the Spread falls below 4.00%. The Greek 10-Yr (16.25%) might also not fall further after having dipped from 17.85% on 05-Nov.

Of course, it will be very good news if Spanish and Greek yields were to drop further. But, we have to be careful now.

The US 10-Yr (1.63%) has dipped from the earlier 1.69-67% region reflecting the concerns (China, Europe and USA) facing the world. The best we can hope for is stability between 1.60-70% for some time. A rise past 1.70% looks difficult for now. It will be good if a fall to 1.50% is avoided.

14:00 GMT or 20:30 IST Oct US New Home Sales
...Expected 387K ...Previous 389K

Oct US Durable Goods Orders
...Actual 0.0% ...Previous 9.2%

US Case Schiller
...Actual 3.0% ...Previous 2.0%

US Cons Conf
...Actual 73.7 ...Previous 73.1

...Actual 1.0% ...Previous 1.0%

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