Daily Outlook 11.21.2013 This morning most European and Asian binary markets are still on a losing edge this morning, mainly as the US Fed may reduce stimulus. Asian markets are declining for the third day on the back of weak manufacturing data out of China and worries over stimulus tapering. Chinas growth momentum softened a little in November on the back of weak new export orders and the slowing pace of restocking activities, flash survey results from HSBC and Markit Economics revealed. The headline manufacturing PMI index came in with a score of 50.4, touching a two-month low and down from 50.9 in October. Japanese shares bucked the downward trend, with the benchmark Nikkei climbing nearly 2 percent after the yen hit a two-month low versus the dollar and the Bank of Japan kept its ultra-easy monetary policy unchanged, citing signs of economic recovery and rising core consumer price inflation, which is now in the range of 0.5-1 percent. European stocks are poised to open lower on Thursday after minutes from the latest Federal Reserves October policy meeting revealed members expect incoming data will show improvement in the job market warranting the need to taper the pace of monthly asset purchases in the coming months. U.S. markets fell yesterday and Treasury yields spiked higher as the FOMC minutes revealed that the central bank could begin tapering sometime soon. As soon as they feel the economic conditions are right and would support this move, it could happen. The timeline is the “coming months.” The minutes revealed that they feel economic reports could “prove consistent with the committee’s outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pact of purchases in coming months.” After the FOMC release, Treasury yields on the 10 year bond spike 9 basis points over 2.8 percent. The Nikkei (15322, +246, +1.63%) is up sharply on a weaker Yen (100.36). The Chinese Manufacturing PMI (50.4) has come in lower than the expectation of 50.8. The Shanghai (2195, -0.52%) is retreating from the strong 2200-2225 Resistance region. Growth seems to be in question all around. Talk of Taper in coming months induces profit-taking in the Dow (15900.82, -66.21, -0.41%). We continue to see 16100 as a crucial Resistance which is holding well. A break below 15800 (if seen) will be very bearish. CURRENCIES USD/JPY (100.447) has hit a high today at 105.00 and we continue to test this level. This is a four month boundary high (upper level of a range trade). If we break above 100.60 we can target 105.00. EUR/USD (1.3415) has hit the support zone of 1.3420. We are dangerously close to 1.34 and a break of this level opens the doors for 1.33 and then 1.3150 and lower. GBP/USD (1.6077) failed at 1.6180 as expected. Any future rallies need to break this level but face a challenge at 1.6300. COMMODITIES Gold (1248.33) has fallen sharply after FED signaled tapering in the coming months. We may see a little upward correction but overall near term bearishness exists. Silver (19.87) continues to fall and may target support near 18.5 Oil WTI (93.690) is trading between the 100-Wk and the 200-Wk Ma . We could see a sideways movement in this range for sometime now. A rise past 95.50 would ensure a break in the recent downtrend. TODAY’S MAIN TALK : Markets will be digesting the FOMC meeting minutes all day as the renewed threat of when the Fed will begin to taper its asset purchases concerns investors. As far as U.S. data we get weekly job claims at 0830 EST and the PPI at 0830. Mark Owen Senior Account Manager UK Phone: +44-8000-885147 | Website: tradehits Email: Mark@tradehits | Facebook :/facebook/mark.owen.3781995 Disclaimer: The information in the above analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.
Posted on: Thu, 21 Nov 2013 09:52:06 +0000
Trending Topics
Recently Viewed Topics
© 2015