A small dip in the Dow (12962.81, -14.76, -0.11%) last night. There can be a danger of a dip towards 12500. The overall mood has been dampened after China lowered its own growth forecast to 7.5% from 8.0% earlier. Asian stocks are also trading lower, with losses ranging from -0.25% (Malaysia) to -1.22% (Taiwan). The Shanghai Index (2426, -0.76%) has dipped a goodish bit since yesterday and could test an important Support at 2400-2350.
The Nifty (5280.35) has chances of falling further towards 5200, possibly even 5100, especially if UP sees President's rule. Let's see.
Gold (1704.40) has weakened through last week and yesterday, coming down from a high near 1790.55 seen last week. Crucial Support is coming up at 1680. In case that breaks, we could see a further decline towards 1625.
Nymex Crude (106.83) has fallen from last week's high of 110.56 and could fall further towards 105. This could be in reaction to the Chinese growth downgrage.
Copper (3.85) has crucial Support near current levels and could move up if it holds. A break of Support, on the other hand, could push the market down towards 3.5. We have to watch this carefully.
The Aussie (1.0646) has dropped the most, reacting to the dip in commodities, and to caution ahead of the RBA Meeting today. Consensus is that interest rates will be kept steady, but there is a small danger of a cut as well, following China's growth forecast of 7.5%. A fall towards 1.0600 may now be possible.
The Euro (1.3215) is managing to remain above 1.3180 so far. A rise past 1.3250 could be very bullish if the EUR GDP happens to come in a little better than the expectation of -0.3%. On the downside, a break below 1.3180 could be very bearish setting up a fall towards 1.30, even lower. A good number will be sorely needed today.
Dollar-Yen (81.41) has found some Support at 81.10 in the US session yesterday and remains in its overall uptrend. The crucial intra-day Support to watch now would be 81.20-10 and then 80.90.
Dollar-Swiss (0.9127) is battling between Resistance at 0.9150 and Support at 0.9100. The Pound (1,5863) has bounced well from yesterday's low near 1.5785. There can be chances of a sizeable upmove in the coming days if the Support continues to hold and other currencies also stabilise.
Among the Emerging currencies, the Brazilian Real (1.7388) is trading weaker as the central bank is clearly in favour of a weaker Real. A test of 1.75 might be possible. The USD-SGD (1.2610) may find Range Resistance near the current levels. Dollar-Rupee (49.8450) is overbought, but could test 49.95 or even 50.25 in election result volatility.
German Yields have been moving down over the last few days and this is bringing the Bund-Bond differential lower, which is, in turn putting pressure on EUR-USD. However, some Support should be coming up for the 2-Year differential near -0.15%.
The US LIBOR is still dipping a bit, with the 3-mth and 6-mth quoted at 0.47% and 0.74% respectively.
4:30 GMT or 10:00 IST RBA Meeting
...Expected 4.25% ...Previous 4.25%
10:00 GMT or 15:30 IST EU GDP Q4 '12 (Second)
...Expected -0.3% ...Previous -0.3%
13:00 GMT or 18:30 IST PMI CA
...Expected 62.2 ...Previous 64.1
EU Retail Sales
...Actual 0.3% ...Previous -0.5%