INDIA: India Country Wrap: India PMIs Remain Very Strong .
- India’s economic growth slowdown is temporary and the country can still achieve faster expansion in the future to reach Prime Minister Narendra Modi’s goal developed country goal in coming decades, a top official said. “It’s premature to say that we are destined to grow at 6.5% for the longer term,” India’s Chief Economic Adviser V. Anantha Nageswaran told Bloomberg TV’s Haslinda Amin in an interview on Monday. “When the global conditions change, we will grow at much higher rate.” (source: BBG)
- Prime Minister Narendra Modi gave India’s middle classes significant tax relief in his budget to cushion the economy against global headwinds, but provided little direct support to the millions of unemployed who voted against him last year. India’s finance minister on Saturday unveiled a record $11.5 billion in tax cuts that will spare 10 million more Indians from income tax. Other measures included new subsidies for farmers and tariff reductions. (source: BBG)
- India’s January HSBC India Manufacturing PMI came in a +57.7, from +58 in December. Output rose to +60.1 from +59 in December and new orders we up from the month prior. For new orders it was the highest reading since mid-year last year. India’s Central Bank meets this week with market observers mixed as to their course of action. Today’s data shows there is no rush to cut rates.
- As is the case with regional peers today, India’s NIFTY 50 is opening weak, down -0.75%
- INR: is caught in the tariff cross fire down -0.55 at 87.10.
- Bonds: Unsurprisingly (given the volatility) bonds are opening strong with the 4YR -4.5bp at 6.604% and the 10YR -3.5bp at 6.664%.
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Historical bullets
JGB TECHS: (H5) Returns Lower
- RES 3: 149.55 - High Mar 22 (cont)
- RES 2: 147.74 - High Jan 15 and bull trigger (cont)
- RES 1: 144.48/146.53 - High Nov 11 / High Aug 6
- PRICE: 142.12 @ 15:01 GMT Jan 03
- SUP 1: 141.65 - Low Dec 30
- SUP 2: 141.56 - 1.764 proj of the Aug 6 - Sep 3 - 9 price swing
- SUP 3: 141.05 - 2.000 proj of the Aug 6 - Sep 3 - 9 price swing
Markets slipped on the hawkish Fed and are yet to fully recover, touching 141.65 on the way lower. Medium-term trend signals on the continuation chart continue to point south. A resumption of the trend would pave the way for a move towards 141.56, a Fibonacci projection point on the continuation chart. A stronger recovery would open 144.48, the Nov 11 high. Further out, key resistance is at 146.53, the Aug 6 high (cont).
USDCAD TECHS: Bull Flag Highlights A Clear Uptrend
- RES 4: 1.4669 2.0% 10-dma envelope
- RES 3: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4392 @ 15:50 GMT Jan 3
- SUP 1: 1.4336 Low Dec 20
- SUP 2: 1.4307/4232 20-day EMA / Low Dec 17
- SUP 3: 1.4136 50-day EMA
- SUP 4: 1.4011 Low Dec 5
USDCAD is unchanged and bulls remain in the driver’s seat. The latest pause appears to be a flag formation - a bullish continuation signal. Note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4508 next, a Fibonacci projection level. Initial firm support to watch lies at 1.4307, the 20-day EMA. A pullback would be considered corrective.
AUDUSD TECHS: Southbound
- RES 4: 0.6471 High Dec 9
- RES 3: 0.6408 50-day EMA
- RES 2: 0.6341 High Dec 18
- RES 1: 0.6247/6282 High Dec 30 / 20-day EMA
- PRICE: 0.6204 @ 15:21 GMT Jan 3
- SUP 1: 0.6179 Low Dec 31
- SUP 3: 0.6158 1.236 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 3: 0.6100 Round number support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
A bearish trend condition in AUDUSD remains intact and the pair continues to trade closer to latest lows. Recent weakness maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. Scope is seen for an extension towards 0.6158 next, a Fibonacci projection. Initial firm resistance to monitor is 0.6282, the 20-day EMA.
