Morning Dew - August 15th 2013

Key Points

• There is no change in view that the JCI is seen capped at the EMA resistance around 4710-4720 while the downside is seen supported by 4658 (previous resistance turned support) and 4563. Below the latter will mean the second wave of c is still in force. Weak Dow is supporting the negative outlook scenario so far, so watch the downside cautiously.
• US Producer Price Index signals timid inflation on the production stage in July while at the consumption stage we will have the data tonight. Other data set for release today are jobless claims, industrial production and Philadelphia Fed index. No big surprises are expected as the market will stay focusing on the next Fed meeting in September. As we nears the meeting date, anxiety over the possibility of a reduction of stimulus will haunt the investors and keep the upside potential limited for now.
• European economy finally sees a light at the end of the tunnel as GDP data released on Wednesday showed economy was growing during the second quarter. All three data coming from Eurozone, Germany and France told the same story, but whether this will be consistent or not is remain to be seen.

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