Market Morning Briefing

EQUITIES

World MSCI increased well during the week far. Note, it is trading (1284.24,+3.01) at a major resistance and may come off to 1260 level. However if it moves up then it may test 1300 in a week.

Euro AREA

STOXX50 (2522,+9) broken above the short term resistance at 2500. Yesterday Greece political parties agreement on further austerity measures may help the index to move further. We believe that the event will have a short term impact to a longer term problem. However 2550 will be a crucial resistance to test by the index.

USA

Dow increased well during mid trading hours but came off eventually to close at 12890 (+9). We see a major resistance at 12900 with a support at 12600 and if it breaks below this them can come off to 12500.

ASIA

Nikkei is trading low at 8984 (-17pts) during the early hours. The index is facing a medium term resistance at 9000-100 and a long term trend line resistance at 9200. A failure to break above these Resistance can see fall towards 8800 initially and 8400 eventually before any rally.

Sensex closed high (17830, +123) yesterday. This sharp up move in the index can see some profit booking to come during next couple of trading days. Chances are very high that 18000 level can restrict further up move in short term.

COMMODITIES

Nymex Crude (99.59) is still not gaining strength for a strong break/close above 100 and remains mixed. 101.50 is an important Resistance level which could be tested on a strong rise past 100. Support is seen in 98.50-00 region.

Gold (1732) is continuing to trade below 1750. As we had mentioned yesterday, while below 1750, we see chances of it coming down to 1700-1680 in the coming days.

Silver (33.88) continues to remain ranged and mixed between 33.00 and 34.50.

Copper (3.95) has broken its 3.76 and 3.93 sideways range on the upside and is keeping up our bullish view intact for a test of 4.10-20.

CURRENCIES

The Greek political leaders reached an agreement on the austerity measures to obtain the bailout package. The Euro (1.3279) remains higher, but needs to break above the 21-Week-MA Resistance (1.3341) for further rise. However, the overall picture is bullish with good Support in 1.3200-3185 region. Dollar-Yen (77.63) is trading strong and can test 78. The Euro-Yen Cross (103.06) has risen above 103 and has Resistance near 103.50, a break above which can take it up to 104.85-105.

Dollar-Swiss (0.9121) remains weak. But it has good Support at 0.9075 which needs to be broken to see further fall. Cable (1.5804) is ranged between 1.5790-5930. Aussie (1.0742) found Resistance near 1.0825 yesterday and has come off below 1.0800. The overall picture is bullish with strong Support in 1.0700-680 region.

In Asia, the Korean-Won is trading near 1121 and the Sing-Dollar is trading near 1.2515. Dollar-Rupee had closed higher yesterday at 49.49/50 and can now test 49.80 on the upside while above its 49.30-25 Support region.

INTEREST RATES

US treasuries rallied compressing the yields during the Japanese session. 5Y and 10Y yields slipped by 1bps to 0.83% and 2.02% respectively. 10Y yields may test 1.90 in coming days and a further break can see dip towards 1.80.

In Germany, the 5yr and 10yr Bund yields were up 4 bps each to quote at 0.96% and 2.02%.

Yesterday, the BOE and the ECB left their benchmark rates unchanged at 0.50% and 1.00% respectively. Also as expected the BOE has BOE announced an increase in its bond purchase and pump in additional 50 billion pounds into the economy.