Thursday August 27, 2009 - 03:39:35 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 27-Aug-2009 - 0337 GMT
Dow (9453.52) and Nasdaq (2024.43) closed flat yesterday after another choppy session. Dow has now closed in the green for 7 days at a stretch. However, this week, the rise has been uncertain as every rise towards the Trendline Resistance on the daily chart is witnessing sharp pullback. This has been despite better than expected economic data and as the markets prepare for other important data releases for the rest of the week. Durable Godds Orders and New Home Sales that were released on Wednesday have been encouraging, beating street expectations. To Q2 GDP numbers are likely to be announced today, and Personal income the day after. These would set the trend for the market going forward for the next month. For more information, see the DATA TODAY section below. To see the chart of Dow, click on: http://www.kshitij.com/graphgallery/djiacandle.shtml#candle
Asian indices are trading mixed. Nikkei (10470.99) is cautious ahead of elections on Sunday and is down nearly 1.6% while Shanghai (2967.84) is up 0.35%. The Sensex (15769.85) closed half a percentage higher yesterday as the range of 14300-16100 continued to be honoured. We shall have to see over this week and the next whether 16000 Resistance is able to hold strong or give in to the bulls.
Crude (71.31) fell yesterday and tested the Support at 70.50 mentioned earlier following the data released by the US Energy Information Administration (EIA) that showed an increase in crude inventories. As mentioned earlier Support is seen in the region 70.50-00, a break below which might see a dip towards 67.50. We may expect Crude to consolidate between 70.00-72.50 for some time.
Gold (945.50) is continuing to trade below 950. Support is seen at 940,a break below which might see a downmove towards 930. On the upside, a strong break above 950 might take it up towards 960.
Sterling (1.6236) has been the biggest mover yesterday, falling to a low near 1.6160 from a day high near 1.6357, reportedly on 2-yr yields hitting record lows. The Euro (1.4249) trades relatively weak despite good IFO numbers yesterday. Dollar-Yen (93.75) has come off sharply today, hurting most currencies. Keep a sharp eye on crucial Support at 93.00-92.85. Overall, the "risk" currencies seem to be facing an uphill task here.
Dollar-Swiss (1.0680) has moved up substantially, lowering the danger of a fall to 1.05. The Aussie (0.8270) has weakened over the last three days given the dip in commodities and in Dollar-Yen.
In Asia, the Won is trading weaker near 1249. The Rupee had weakened to 48.9250 yesterday and is in danger of weakening further towards 49.20. The 1-week and 1-mth NDFs are offered at 49.00 and 49.05 respectively.
3M USD LIBOR was set 1 bp lower at 0.37% while the US Treasuries were little changed yesterday. The 10Y Benchmark yields were quoting at 3.43%.
Back home in India, the yields on Indian Government Bonds dipped sharply after the RBI unexpectedly announced OMO purchases yesterday and the weekly inflation numbers came in at -0.59% Y-o-Y. The 10Y bond yield fell 17 bps to 7.13%
12:30 GMT US GDP Q2 '09 (Pre)
...Expected -1.3%...Previous -1.0%
GER IFO Business Expectations
...Actual 95.0...Previous 90.4
GER IFO Business Situations
...Actual 86.1...Previous 84.3
GER IFO Business Climate
...Actual 90.5...Previous 87.3
July US Durable Goods Orders
...Actual 4.9%...Previous -2.2%
June US New Home Sales
...Actual 433K...Previous 395K
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