Singapore Markets Morning Briefing - what you need to know for Fri Jan 13, 2012

Singapore finds support from Nikkei strength and Wall Street gains.

- OCBC Investment Research said continued gains on Wall Street overnight and a strong Nikkei start (+1.0%) could buoy the local bourse.

The STI, which closed 0.1% lower yesterday, continue to push for the next key resistance at 2800, although the index could run into pretty stiff resistance around 2793 (early Dec 11 high, also 38.2% retracement of fall from 3227-2521).

But they’re not ruling out possible profit-taking later in the day as investors lighten up positions ahead of the weekend. On the downside, they continue to peg the initial support at 2727 (50-day moving average), ahead of 2700.

US equities advanced on European optimism after the ECB left interest rates unchanged and borrowing costs declined at Spanish and Italian bond auctions. Investors overlooked disappointing US economic data, which saw weekly jobless claims rise and retail sales rising less than expected.

Crude for Feb delivery fell sharply late in the trading session after a report suggested that an embargo on Iranian oil imports to Europe would be put off by six months to allow for the procurement of alternate supplies. Prices fell US$1.77, or 1.8%, to close at US$99.10/barrel.

Gold for Feb delivery gained US$8.10, or 0.5%, to settle at U$1,647.70/ounce on the back of a weak US dollar. Mar silver also edged higher by 23 cents, or 0.8%, to end at US$30.12/ounce.

- RBS said the EUR surged during the NY morning after the ECB left the benchmark rate unchanged in what felt like a short squeeze. EUR/AUD and EUR/NZD, two short EUR positions that were extremely oversold on the RSI, rallied sharply and EUR/AUD in particular would complete a bullish daily reversal off its all-time low with a close above 1.2406.