Morning Market Briefing

EQUITIES

Most of the indices inched up on sign of growth in global manufacturing as gauged by PMI for individual economies. STOXX 50, the EA stock index, gained 19.17 pts (2389). We expect it to move up further but may face a strong resistance at 2500. In the US, Dow closed high at 12397 (+179pts) and in Asia both Nikkei and Shanghai are trading high at 8553 (+97.8pts) and 2202 (+3.02 pts) respectively. However, Dow may face a crucial resistance at 12500; if it holds then we may see some short term consolidation at 12500 on the upside and 12000 on the downside.

COMMODITIES

Nymex Crude (102.73) has risen well above its 101.00-50 Resistance region. As we had mentioned yesterday, the overall picture is bullish for a rise to 110+ levels.

Gold (1597) has risen sharply. It needs to be seen whether it manages to see a strong rise past 1600 or not. We will have to wait and see.

Silver (29.26) has risen well and is now trading above 29 thereby easing the threat of seeing 25-23 on the downside.

While above 29, a further rise to 31-32 is possible. Only a strong break above this 31-32 Resistance region will wipe out the downside threat.

Copper (3.48) is continuing to find Resistance in 3.50-55 region and remains bearish overall. A dip to 3.30 looks likely while below its 3.50-55 Resistance region.

CURRENCIES

Euro (1.3030) has risen above 1.3000, but is now coming off from just below the 21-DMA Resistance (currently at 1.3074). Support is seen in 1.3020-00 region and and while it holds, the chances of seeing 1.3100-50 on the upside cannot be ruled out. Dollar-Yen (76.67) is trading flat in a narrow range of 76.62-88 and remains weak overall for a test of its Supports in 76.55-50 region and 76.25-20 region. The Euro-Yen Cross (99.85) failed to sustain the break above 100 and has come off from its high of 100.31. While below 100 it can dip to 99.30-10 or even lower today. 98.40 is an important Support on the downside which we expect to hold.

Dollar-Swiss (0.9339) fell breaking below its 21-DMA (currently at 0.9362), but is bouncing back from near its Support at 0.9300. Now we need to see a strong bounce back above the 21-DMA to ease the downside pressure, failure of which will keep it pressured on the downside for a break and fall below 0.9300 towards 0.9200. Cable (1.5630) has risen further and can rise further to 1.5700-50. Aussie (1.0327) is coming off from its high of 1.3086. It has Support near current levels in 1.3015-00 region and while it holds, a bounce back towards 1.0400 once again is possible.

In Asia, the Korean-Won is trading near 1148 and the Sing-Dollar is trading near 1.2888. Dollar-Rupee remains ranged between 53.00-50.

INTEREST RATES

German bund yields increased marginally across all tenors, 2Y closed at 0.19 %( +1bps) and 10Y at 1.90% (+1bps). US treasuries yields have spiked up as latest economic releases hinting to better that expected economic fundamentals of the country, 2Y expanded at 0.27% (+2bps) and 10Y to 1.95% (+5bps).
In India, 10Y GOI bond yields came off further to 8.37% (-3bps) on increasing expectation on rate cut by RBI.

DATA TODAY

No major data release today.

DATA YESTERDAY

PMI CH
...Actual 50.7 ...Previous 44.8

PMI UK
...Actual 49.6 ...Previous 47.7

Dec US Manufacturing ISM
...Actual 53.9 ...Previous 52.7