Market Morning Briefing


Dow Jones (13245.45, -0.02%) closed flat, Fed increased the bond buying program from $40 Bln to $45 Bln per month as expected to boost an ailing economy. Bernanke warned yesterday that the fiscal policy lacks the tools to safeguard the economy if it falls from the “Cliff”. Technically 13250-300 needs to be crossed for a further rise towards 13600.

Asian markets are doing well and are mostly in the green on Fed action. Australia (4596, +0.09%), Hang Seng (22541, +0.17%) and New Zealand (3982.05, -0.33%).

Shanghai (2078, -0.22%) is marginally in the red. View remains the same and a break of 2100-20 will be bullish and will end the long term down trend.

Nikkei (9736.37, +1.62%) has moved up very well as expected and is close to its 9800-50 target. A further move towards 10300 can be seen on a break of 9800-50 but chances of 9800-50 holding on the first test are quite good.

Nifty (5888, -0.18%) continues to consolidate between 5950-850 within its overall uptrend. On the bigger view it continues to target 6000+. A dip if at all seen below 5850 will find aggressive buyers near 5750

Oil has risen a bit, Nymex looks better than Brent, Gold and Silver can dip further and Copper can also see some correction.

Nymex Crude (86.41, -0.41%) has risen from its 86-85 supports. A strong rise from current levels can avert a possible fall to 80.00. A rise can take it towards 94.00.

Brent (108.93, -0.52%) has resistance near current levels and is likely to dip towards 103-02 in the near term and further lower levels also cannot be ruled out.

Gold (1701, -0.97%) has traded weak as expected and can fall further towards 1675-50 in the coming sessions. But talking about the longer term this corrective fall can be bought.
Silver (32.99, -2.34%) has fallen and can weaken further towards 32.50 in the near term. This is an important support and will decide further move.

Copper (3.68, -0.90%) is facing resistance near 3.70-73 and a corrective dip towards 3.60 cannot be ruled out. Bigger trend still looks positive.

As expected the Fed had increased its stimulus to $45billion a month from the earlier $40billion. In addition to this it has set a target to keep the interest rates lower and unchanged until the unemployment falls below 6.5%. Yen is traidng weak. The Euro and Swiss could remain ranged. Cable and Aussie remains strong but important Resistance are ahead for both. The Dollar-Index (79.89) has dropped below 80 and can come down further to 79.70-50 in the coming days.

The Euro (1.3065) is coming off from its high of 1.3097. The 1.2880-3130 range seems to be holding and a pull back to 1.3000-2950 is possible while below 1.3100. Dollar-Yen (83.38) has broken its 81.70-82.80 range on the upside as expected and can now target 84-85. The Euro-Yen Cross (108.98) has risen above 108 as expected and is now bullish for a rise to 109.50 immediately and then to 112 there after.

Dollar-Swiss (0.9267) fell sharply to test its 0.9250 Support which is holding well. The 0.9240-0.9400 range remains intact. The Pound (1.6128) remains higher but will need a strong break close above 1.6150 and 1.6200 to bring it further bullishness for a rise to 1.6500-6600. Aussie (1.0546) remains strong and can test its important 1.0600-30 Resistance region now. This week's closing will be very significant in deciding the trend for the Aussie going forward.

In Asia, the USD-SGD (1.2207) remains mixed/flat above 1.2200. Dollar-Rupee (54.3250) could remain ranged between 54.00 and 54.60 for some time.

The US Fed has left the rates unchanged at <0.25%. This time the Fed has set a target that the rates will remain lower until the unemployment rate falls below 6.5%. The US 10yr yield has risen further by another 4bps to 1.69% thereby reducing the chances of a fall to 1.50%. A further rise to 1.75%-1.77% is possible in the coming days while the yield stays above 1.65%.

The Spanish 10Yr yield has come down by another 10bps to 5.36% from the earlier 5.46%. This has pulled down the Spain-German spread by another 11bps to 4.03%. The spread is coming down as per our expectation and it can target 3.75%-3.50% on the downside which give more relief to the market in the coming days.

7:30 GMT or 14:00 IST SNB Meeting
...Expected <0.25% ...Previous <0.25%

12:30 GMT or 19:00 IST Nov US PPI ex Food & Energy (YoY)
...Expected 2.2% ...Previous 2.12%

12:30 GMT or 19:00 IST Nov US PPI ex Food & Energy (MoM)
...Expected 0.2% ...Previous -0.20%

12:30 GMT or 19:00 IST Nov US Core Retail Sales
...Expected 0.4% ...Previous -0.3%

UK Unemp
...Actual 7.8% ...Previous 7.8%

Oct EU IND Prodn (YoY)
...Actual -3.90%...Previous -2.56%

Oct EU IND Prodn (MoM)
...Actual -1.40% ...Previous -2.30%

US FOMC Meeting
...Actual <0.25% ...Previous <0.25%

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