Friday, July 12

Asad Rizvi

Market continued to debate Bernanke's Boston speech. It seems that there is no consensus yet on Fed's next line of action and this is Fed's achievement, as they look successful in mentally preparing the market for it's next move. Fed members will continue to through their idea's on the possibility of reducing its asset purchase plan until it announces it's plan to act.
Such a strategy should help Feds cause, as it may not have larger impact in the market and may simultaneously help in reducing the volatility. So be prepared for more statements from FED officials and try to catch/stay with the trend because all Fed members do not carry identical written notes and will not speak same language and therefore, views will differ. Remember its the final vote that will counts, rests is all talking. Though my count for Fed votes shows tilt towards tapering.

The stock may have jumped, gold took a breather and the US Dollar may have fallen, but 10-year bond yield is still hovering around 2.58 pct, despite poor US initial jobs claim numbers. In my yesterday's note I said to keep a close watch on 10-year US Treasuries and the maturity gap between short/long for more guidance. If yield fails o fall below 2.50 pct, the bearish spell will be short lived.

Meanwhile, Euro regions economy that is showing signs of nervousness and remains shaky due to economic misery in the Euro zone and if industrial production falls today, this may not bode well for the ECB planners working on the possibility of easing rate could help in halting the short Euro rally that also got boost after minor rise of US initial jobless claims.   

GMT 2:20 - EURO @ 1.3087 = I would still like to a break above 1.3110-20 for a move towards 1.3160 or else failure will encourage for a test and break of 1.3040-50 zones will threaten to challenge 1.3005-10 levels.

GMT 2:29 - GBP @ 1.5178 = The key is 1.5140-50 levels. If holds, Cable could test and surpass 1.5210-20 levels for 1.52540-40 zones. Or else 1.5090.

GMT 2: 34 - JPY 99.04 = It looks difficult to break 99.40-50 zones, which increases risk for a test of 98.25levels. Break could mean larger Yen gains or else .99.70.

GMT 2:39 - AUD @ 0.9174 = At moment 0.9220-40 looks difficult to crack, as Aussie may not surpass 0.92 levels, increasing risk for a test of 0.9110 levels, break will encourage for a move towards 0.9040.

GMT 2:46 - GOLD @ $ 1284.70 = Strong support around $ 1278-80 may hold and and risk for test of $ 1295-98 zones, Unless fall below $ 1274-75. Bias is on the upside before exhausting.  

DISCLAMER : The commentary/information presented is not intended for trading purpose. The idea is to exchange views with the members/readers. Therefore, I accept no responsibility or liability for any losses incurred due to position taking.