|
|
Theme of the Day
-
Market awaits RBI's policy decision scheduled later in the day. Meanwhile, the RBI yesterday released its Macroeconomic and Monetary Developments Review for Q2'FY2014, wherein it concluded that monetary policy faces an unenviable task of anchoring inflation expectations, amid tepid growth and weak business confidence.
View Today
-
DXY:
The US Dollar index is currently trading slightly higher at around 79.40 compared to yesterday's close of 79.25. Nevertheless, the Dollar has weakened more than 1% in October (month till date) as market participants expect QE-tapering to begin later than previously thought. Markets now look forward to Fed's policy decision
tomorrow, for possible cues on the Fed action plan. Meanwhile, data released yesterday showed that US pending home sales dropped by the most in more than a year in September, providing further rationale for the Fed to maintain its current pace of assets purchases. The intraday trend for DXY is bullish with support and resistance at 78.85 and 79.90 respectively.
-
EUR/USD:
After trading at close to 1.38 against USD for most of yesterday, Euro closed lower at 1.3785. It is currently trading at below 1.3780. Italian business confidence index dropped from 82.8 in September to 79.3 in October 2013. Although the confidence index in manufacturing and
construction sectors rose this month, the positive turns were offset by a fall in services and retail trade. Today, German GfK consumer confidence index and Italian retail sales for September will be released. The intraday trend for the Euro is bearish, with support and resistance at 1.3740 and 1.3840 respectively.
-
GBP/USD:
Sterling has also weakened sharply from yesterday's high of 1.6208 to the current levels of close to 1.6090 against USD, as against yesterday's closing of 1.6142. Although there was no major macro-economic data release in the UK,
it seems to have followed euro weakness and USD strength. Today, banking statistics for September 2013 will be released, which will be closely watched. The intra day trend for the GBP/USD cross is bearish with support and resistance at 1.6040 and 1.6140 respectively.
-
USD/JPY:
Japanese Yen (JPY) traded range-bound yesterday, moving between 97.45 and 97.80 and closed at 97.68. It has strengthened slightly today and is currently trading at close to 97.55 against USD. Recently released data seem to suggest that Japan may be making steady progress to end 15 years of deflation. Japanese jobless rate fell to 4.0% in September and the
availability of jobs held steady at highest levels in more than five years. Besides, Japanese retail sales rose 3.1% YoY in September, higher than the median market's forecast of 1.9%. Technically, the intra day trend for USD/JPY cross is ranged with support at 97.20 and resistance at 97.90.
-
USD/CHF:
The USD/CHF pair is currently trading higher at around 0.8965 compared to yesterday's close of 0.8958, tracking the slight recovery in the US Dollar today morning. Meanwhile, the Franc continued to weaken against the Euro for the fourth consecutive trading day amidst largely upbeat risk sentiment. EUR/CHF is currently trading higher at around 1.2350 compared to yesterday's low of 1.2320. Going ahead, markets will look forward to KOF leading indicator, due to be released this week, for further cues. Technically, USD/CHF is expected to trade bullish with support at 0.8920 and resistance at 0.8990.
-
AUD/USD:
The Australian Dollar is trading weaker today morning as the Reserve Bank of Australia Governor Stevens said that the currency might depreciate sometime in the future given declining terms of trade. He said that the Aussie remained unusually high and was not supported by economic fundamentals. He further expressed hope that a lower currency would aid Australia's trade sector. AUD/USD is currently hovering lower around 0.9524 compared to yesterday's close of 0.9572. Technically, we expect AUD/USD to trade bearish with support at 0.9500 and resistance at 0.9580.
-
USD/CAD:
The Canadian Dollar is trading largely rangebound vis-à-vis the US Dollar, as markets await the US Fed's policy decision due tomorrow. USD/CAD is currently hovering around yesterday's close of 1.0445. Going ahead, markets will also look forward to Canada's GDP report due to be released on Thursday. Technically, we expect USD/CAD to trade bullish with support at 1.0400 and resistance at 1.0470.
-
Sensex:
Indian stock markets opened largely flat this morning, tracking subdued cues from Asian peers. Trade in the early session is likely to be rangebound amidst caution ahead of the RBI's second quarter monetary policy review, due later in the day. On the earnings front, NTPC, Marico and Ranbaxy are scheduled to detail their earnings results. Meanwhile, yesterday post market hours, Maruti Suzuki detailed its Q2 earnings that exceeded analysts' estimates. Technically, the Sensex is expected to trade in the range of 20,400-20,800.
-
USD/INR:
The Indian Rupee opened weaker at 61.59 levels as against previous close of 61.52 amidst broad-based Dollar strength. Intraday, market will look for cues from RBI's monetary policy meeting scheduled for later today. Month-end Dollar demand by importers, however, is likely to limit the upside in the Rupee. Meanwhile, in the macroeconomic
report released yesterday, the RBI expects modest recovery in growth in H2'FY2014, led by a rebound in agriculture sector and an improvement in exports. Technically, USDINR is expected to trade bullish with support and resistance at 61.42 and 61.67 respectively.
-
G-Sec:
Indian Government bonds opened weaker as investor sentiment remained cautious ahead of the RBI's policy meeting due later in the day. Market expects a 25 bps hike in the benchmark repo rate to 7.75% today's policy meeting. The yield on the benchmark 7.16% bond due 2023 opened higher at 8.70% vs. prior close of 8.66%.
-
Oil:
Oil prices are trading slightly lower today morning, albeit holding on to most of yesterday's gains. Rising speculation that US crude oil stockpiles possibly rose last week, ahead of the weekly report of the American Petroleum Institute due today, is weighing on prices. Meanwhile, in yesterday's trade, oil prices had gained, with Brent having risen by nearly 2.5% after a Libyan state-run firm said that Libya's oil output had dropped by almost half amidst disruptions due to labour protests. Currently, WTI is trading at USD 98.4/bbl vs. prior close of USD 98.7/bbl. Brent is currently trading at USD 109.1/bbl from prior close of USD 109.6/bbl. Technically, Brent is expected to trade bearish between USD 108.4 -109.7/bbl.
-
Gold:
Gold prices are trading higher this morning, extending yesterday's gains amidst growing speculation that the Fed would maintain status quo in its FOMC meeting that is scheduled to conclude tomorrow. Also, holdings in the SPDR Gold Trust- the largest gold-backed ETF, held steady for a second consecutive day yesterday, thereby keeping bullion prices supported. Today morning spot gold is at USD 1356.5/oz vs. yesterday's close of USD 1352.6 /oz. Technically gold is expected to trade ranged between USD 1340-1380/oz.
Please find attached herewith a file containing the detailed analysis.
Regards,
ICICI Bank : Treasury Research
Contact:
Samir Tripathi:
(+91-22) 2653-7233
Nikhil Gupta:
(+91-22) 2653-1414 (extn: 2180)
Pooja Sriram:
(+91-22) 2653-1414 (Extn: 2195)
Tadit Kundu:
(+91-22) 2653-1414 (Extn: 2087)
|
|
|
