Market Morning Briefing

GOOD MORNING!

STOCKS
Dow (17,778.15, +2.43%) In a free stock market technical outlook, a reading of demand-supply has some meaning. In a regulated sphere, it barely has relevance. US equities' rise yesterday, broke key pattern triggers (expected at 17,600), with another key possible resistance now at 17,790 and 17,880. Simply put, the trend has turned positive and markets should be at new highs soon, with one more confirmation (17,800) to be made.

Nikkei (17,534.99, +1.89%) is trading above 17,500 and now the targets are at 17,800. It is highly likelyNikkei would trade within the large range of 18,000 to 16,500 for medium term. This will allow markets to consolidate at new levels before any further up moves.

Shanghai (3061.18, +0.12%) was rejected near the previous highs of 3,091s. For the day, it may retest or break above these levels. Trading above 3091 on sustained basis will void all bearish outlooks. The next targets on the break out would be at 3,200 and 3,264. The short term bearish trade remains intact at this moment.

The near certainty of ECB's QE has helped propel Dax (9,811.06, +2.79%). On the breach of 9,900, we look for new highs above 10,100. The first target at new highs would be at 10,500.

Nifty (8,159.30, +1.61%) is likely to gain further on global outlook. The resistance is at 8,300 and 8,420. The supports are at 8,100 and 7,970. The near term trend is up.

COMMODITIES
Brent(59.48) and Nymex WTI(54.86) are paused for the last few sessions and may end the week flat at current levels. A rise towards and above 71.42 i necessary to confirm any immediate reversal signals.

Gold (1198.15) and Silver(15.91) have risen a bit but may continue to hold the current range next week also. overall the long term trend remains down.

Copper (2.8725) is trading lower in the 2.85-2.95 region and if a break below 2.85 is seen it may target 2.75 in the near term.

FOREX
SNB's negative official bank rates are the first such move by major central bank. SNB's Euro-peg has been supporting Euro by bidding it. With the bids, gone Euro plummeted. This move also highlights the near certainty of ECB's QE (and sovereign asset purchases) starting soon.

Euro (1.2279) is holding above a thin line of support 1.2264. Its a matter of time before 1.22 and 1.21 supports are tested. 1.2400-1.2500 now becomes a tough resistance.

Pound-Dollar's (1.5665) as expected moved back into the range. We do not have directional trend until it breaks off this range of 1.5750-1.5600. Though near term moves in this channel may be utilized.

Though the larger trend in Dollar-Yen (119.06) is bullish, the near term trend is unclear. We are likely to see some more profit booking emerging between 119.50-120.50. Only the break above 120.50 would confirm the bullish trend continuing in near term.

Dollar-RUPEE (63.11) gained on the correction in Dollar index. Rupee's trading range has shifted upwards, and is most likely to stay range bound at 63.00-63.90. For the very short term Dollars may be bought on expectation of bounce to 63.50 to 63.90.

The bounce in Aussie is sustained above 0.81. Aussie-Dollar (0.8168) The 0.82 level is now a good resistance. Though we may see a corrective rally, the outlook for Aussie remains weak in long term.

INTEREST RATES
The German 2Yr(-0.084%) bund is trading near support levels of -0.1% and may remain ranged above these levels while the 5Yr(0.070%), 10Yr(0.616%) and the 30Yr(1.427%) falls lower. Contraction in the yields are seen where the longer term bunds are falling at a greater pace.

Look at the German bunds http://www.kshitij.com/graphgallery/eursin00.shtml#sin00

The Japanese yields are also falling constantly. The 30Yr(1.331%) is heading towards 1.2% from where a short term bounce can be expected, but overall thetrend is down. TheJapanese 10-5Yr differential (0.306%) has fallen to such lower levels for the first time since 2008, suggesting faster fall in the 10Yr(0.348%) 

The US 10Yr(2.215%) and 30Yr(2.828%) treasury bonds are falling at a greater pace while the 5Yr(1.671%) has been ranged sideways in the 1.25%-1.80% since the last 14-15 months.Flattening of the yield curve is in the formation.

Indian 10Yr GOI(7.9279%) has again fallen but while above crucial support near 7.8% we may see fluctuation in the 7.8-8%.

DATA TODAY

23:05 GMT or 4:35 IST UK Cons Conf 
...Expected -1 ...Previous -2 

3:00 GMT or 8:30 IST BOJ Meeting 
...Expected <0.10 % ...Previous <0.10 % 

10:00 GMT or 15:30 IST EU EA (17) Curr Acct Bal 
...Previous 30.0 EUR Bln 

13:30 GMT or 19:00 IST CA Inflation Y/Y 
...Previous 2.40 %




DATA YESTERDAY:_



GER IFO Business Climate 
...Expected 105.30 ...Previous 104.70 ...Actual 105.50


GER IFO Business Situations 
...Expected 110.30 ...Previous 110.00 ...Actual 110.00


GER IFO Business Expectations 
...Expected 100.90 ...Previous 99.70 ...Actual 100.10

US Philifed Index 
...Expected 26.3 ...Previous 40.80 ...Actual 24.5