Monday September 7, 2009 - 03:33:33 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 07-Sep-2009 - 0329 GMT
Dow (9441.27) and Nasdaq (2018.78) have closed lower last week but has risen over the last three trading days to recover most of the early week losses. There's Support on Dow at 9000 for the week and Resistance at 9600. It is a US holiday today on account of Labour Day. On Friday, the NFP employment change numbers were released better that expected but overall employment rate came in worse than expected at 9.7% which had sent mixed feelings down the Wall St.
The Asian indices are trading strong today. Most of the major Asian indices are trading higher by 1%. Shanghai (2894.34) has seen a strong bounce after the index fell sharply on Monday last week losing close to 7% on a single day. Nikkei (10290.78) looks ranged between 10000-10750 for this week.
Indian equities might take cues from the other Asian indices and may open higher. Nifty (4680.40) is trading near an important psychological Resistance at 4700 and looks well set to be broken. Next important Resistances are at 4750 and 4900.
Crude (67.86) closed just above 68 last week and is now trading just below 68. The lack of momentum on either direction is still continuing. The siginificant level to watch for on the downside is 67, a break below which might see a dip towards 65-63. The OPEC meet in Vienna is on Wednesday (09-Sep) and the US Crude inventories data this week will be released on Thursday instead of Wednesday because of the Labour day holiday today.
Gold (992.50) is continuing to trade above 990. A break above 1000 might see some Resistance at 1010. On the downside Support is seen at 970.
A little more benign start to this week today. Most of the "risky" currencies are doing well.
Good showing by the Aussie (0.8520) and the Euro (1.4330) both of which are doing well today. Both seem primed for further strength. Good news from Dollar-Yen (93.15) as well, which has risen well from Thursday's low near 91.95. The last comparable low was 91.73 in July, earlier this year. The rise in Dollar-Yen is good for most other asset markets.
The Pound (1.6390) had found Support at 1.6115 last week and could rise a bit this week. Dollar-Swiss (1.0595) is just about managing to remain above crucial Support at 1.0525.
The Won (1233.80) has strengthened susbstantially, falling below 1240 on Friday. With luck, we may look for 1225 this week. Dollar-Rupee had closed near 48.88/89 on Friday. Conducive conditions today morning may make for Rupee strength today.
Trade may be quiet in the evening today as the USA and Canada are on holiday.
3M USD LIBOR was set at 0.31% and is inching very close to the Fed's Target rate of 0.25%. The differential gap between 3M and 1M LIBOR has narrowed from 19 bps a month back to 6 bps on Monday. The yields on US Treasuries have risen sharply across the yield curve. The 10Y benchmark yields rose 9 bps and 2Y yields rose 2 bps.
BoE is scheduled to meet this week on 10th and the market consensus is of an unchanged key rate at 0.50%
July CA Labour Force
...Actual 27.1K...Previous -44.5K
Aug US NFP
...Actual -216K...Previous -276K
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