Market Morning Briefing

EQUITIES

All A-Pac indices are trading in the red, following the weak close in the Dow on Friday and the ongoing Spanish debt concerns. Importantly, the Shanghai (2349, -11) is still trading well above the crucial 2500 Support region. US Retail Sales will be an important data today, especially after the weak NFP data released on 6th April.

The Sensex (17094.51) has a crucial Support in the 17000-16800 region. This needs to hold in order to avoid a fall towards 16000. The 21-week MA comes in at 16903. That will need to be watched carefully.

COMMODITIES

Stronger Dollar and weak economic data release from China has triggered a sharp sell off in the Commodity space on Friday.

Nymex Crude (102.23) has come off below 103 once again. Failure to sustain the bounce above 103 would keep it pressured on the downside for a test of 100-98 in the coming days.

Brent Crude (120.04) continues to look weak for a test of 117.

Gold (1652.40) is looking mixed and could remain ranged between 1600 on the downside and 1700 on the upside.

Silver (31.42) is retaining its 31-33 sideways range.

Copper (3.58) has dipped below its important 3.65-70 Support region and can extend its fall further towards 3.50. There is threat on the downside now and the chances of the current fall extending further towards 3.30 cannot be ruled out.

CURRENCIES

Dollar is trading strong all over following the fresh concerns on the Euro zone debt crisis. The Euro (1.3021) is trading below its significant Support at 1.3040 and could fall further 1.2950-30-00 which is an important Support region to be watched for the week. A break below 1.2900 can see 1.2650-00 on the downside. Dollar-Yen (80.88) remains mixed. A test of its important Support at 80.38 (21-MOnth-MA) is possible while below 81. The Euro-Yen Cross (105.37) is trading below its 200-DMA (currently at 105.75) and can now fall to 104.50-00 on the downside.

Dollar-Swiss (0.9230) has risen further and remains strong. Resistance is seen at 0.9245 and a strong break above it will open doors for a test of 0.9350-400 on the upside. The Pound (1.5831) is trading just above its important Support at 1.5800. Whether this Support holds or breaks will determine the further direction of move. Aussie (1.0322) failed to rise past its important Resistance near 1.0450 last week. It needs to be seen whether it can sustain above its significant Support at 1.0250 this week. We will have to wait and see.

In Asia, the Korean-Won is trading near 1136 and the Sing-Dollar is trading near 1.2516. DOllar-Rupee had closed at 51.29/30 of Friday and is expected to remain bullish for a test of 51.80-52.00 while above 51.00.

INTEREST RATES

Spanish debt concerns have dragged the Euro (1.3020) lower. Spain is asking the ECB to buy Spanish bonds and the Eurozone is asking the IMF for money. The Spanish 10-Yr yield quotes near 5.98%, just below 6.0%. The Italian 10-Yr is 5.52%. Spain has 2-Yr and 10-Yr debt auctions on 19th April.

In India, the market is waiting for, thirsting for a 25bp rate cut tomorrow, hoping that the RBI will act to spur growth, given that the government is not doing its job. The 3-mth Mibor (10.27%) and 3-mth Mifor (8.17%) have dipped over the last few days, but may find it difficult to fall further in the near term, unless the RBI cuts rates more than expected.