Daily Coffee Market Outlook

NY- Sell (1)- NY failed to hold the 'high ground' on Friday as May closed below the 133.50 stability level despite posting fresh highs early on in the session. Concensus emerged over the weekend that Chinese premier Win Jiabao may take steps to cool economic expansion by raising rates following higher than expected inflation figures. Similar thoughts emerged from India, sending emerging market indices lower overnight. This is bad news for global markets as whole, especially commodities that have risen sharply over the last year fuelled by Chinese expansion. As such, the 'C' should retreat somewhat although the lower end of the consolidation at 130 is unlikely to be breached. 135 will provide a cap to the upside for now.

Liffe- Sell (1)- Upside developments arising as a result of the Vietnamese stockpiling plan appear to have been put on the back-burner for now as LDN resumed its downtrend at the end of last week. Failure to breach 1280/1300 has sent May Southwards as any hopeful longs liquidate and bears re-instate their positions. Developments emerging from China and the East should put the brakes on any upside potential today and as such we return to our bearish stance barring any more Vietnam rumours. Traders are likely to have their sights firmly on 1200 over the next two sessions and it remains to be seen how much demand will arise there.