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to LONGTERMINVESTORS, library-of-eq...@googlegroups.com, DAILY REPORTS
Theme of the Day
US lawmakers unveiled a budget deal yesterday that seeks to avert a Government shutdown when funding authority expires on January 15th; House of Representatives is expected to vote on the deal on Thursday
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DXY:
Dollar index is trading stronger at 80.02 as compared to yesterday's low of 79.84. The gains came after political leadership agreed to ease automatic spending cuts by USD 63 bn over two years and reduce the deficit by USD 23 bn. The proposal aims to avoid a government shutdown and helped the economy. The House of Representatives is likely to vote on the deal tomorrow, while the Senate will vote on the deal next week.
EUR/USD:
Euro continues to hold its recent gains and is currently trading around 1.3760 against USD, same as yesterday's close. Although French industrial production (IIP) data released yesterday posted a decline of 0.3% MoM in October 2013, disappointing the markets, the manufacturing activities grew 0.4% MoM, which was encouraging. Moreover, Italian IIP increased 0.5% MoM, higher than market's expectation and marking the highest level since January 2013. The manufacturing sector grew 0.7% MoM, while mining activities contracted 3.2%.
GBP/USD:
The Sterling continues to trade around 1.6440 against USD, largely unchanged from yesterday's close of 1.6445. According to NIESR, the UK economy grew 0.8% in the 3 months to November 2013, slightly faster than 0.7% in the three months ending in October. UK's foreign trade data, released yesterday, showed a deficit of GBP 9.7 bn in October, slightly lower than GBP 10.1 bn in September. Moreover, UK's industrial production posted a growth of 0.4% in October, meeting market's expectations and marking its second consecutive growth.
USD/JPY:
Japanese consumer confidence, released yesterday, rose from 41.2 in October to 42.5 in November 2013. Besides, Japanese machine orders were released early morning, helping JPY to strengthen towards 102.80 against USD, as compared to yesterday's low of 103.39. Japan's core private sector machinery orders rose 0.6% MoM in October, in line with the market expectations and against a decline of 2.1% in September 2013.
USD/CHF:
USD/CHF is trading slightly higher today morning at around 0.8884 vs. yesterday's close of 0.8875, after having fallen in each of the last six trading days amidst Dollar weakness. Meanwhile, EUR/CHF (currently at 1.2215) remains ranged ahead of SNB policy decision due tomorrow.
AUD/USD:
The Australian Dollar is trading slightly weaker at around 0.9135 vs. yesterday's close of 0.9151 amidst profit-booking following gains in each of the last four trading sessions. A fall in the Westpac consumer confidence reading and decline in domestic equities are also weighing on the Australian Dollar today morning.
USD/CAD:
The Canadian Dollar is trading flat around 1.0605 levels, holding on to the gains in last few trading sessions. Meanwhile, substantial gains in North American crude oil prices yesterday amidst speculation of decline in US crude stockpiles supported the loonie. Going ahead, markets would watch existing home sales print due early next week for further cues.
Sensex:
Indian equities opened lower by 0.3% this morning, tracking weak cues from global equities. Intraday, continued profit-booking, following significant gains on Monday, is likely to keep the upside limited. Going ahead, markets will look forward to India's CPI inflation and industrial production prints, due tomorrow, for further cues.
USD/INR:
Indian Rupee opened at 61.22 levels as against previous close of 61.05. Overseas cues are negative as Asian equities are trading in the red. Intraday, the currency will also take cues from the domestic equity markets. Markets will look at the domestic trade data scheduled to be released today for further cues.
G-Sec:
Indian G-sec adds to overnight gains in trade today, with the benchmark 10 year bond down 1 bp to 8.83%. Meanwhile, the absence of auction supply in the week is also helping the bonds. Market participants will remain cautious ahead of the macro data scheduled to release later this week.
Oil:
WTI is trading flat this morning, holding on to yesterday's gains. In yesterday's trade, WTI had gained 1.20% after the American Petroleum institute reported a decline in US oil inventories by 7.5 mn barrels last week. Brent, meanwhile, continues to hold on to recent losses after reports emerged that 3 oil export terminals in Libya are likely to reopen later this month, thereby aiding the oil supply outlook. WTI is trading at USD 98.4/bbl vs. prior close of USD 98.5/bbl. Brent, meanwhile is at USD 109.3/bbl, unchanged from prior close.
Gold:
Gold prices are trading slightly lower this morning, albeit holding on to most of yesterday's 1.8% gain. Spot gold is currently at USD 1,257.9/oz vs. prior close of USD 1,262.2/oz. Bullion prices have seen some upside in the last 3 sessions amidst signs of firm physical demand from China. Further, investment demand for the metal has remained steady for this period, thereby aiding prices.
Please find attached herewith a file containing the detailed analysis.
