Monday September 14, 2009 - 03:42:52 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 14-Sep-2009 - 0340 GMT
The Dow (9605.41) closed 1% higher last week. The trend looks bullish with strong Support at 9000. A host of important data releases this week could spell the direction of the stocks for the rest of the month.
The Nikkei (10186.63) has dipped 2.47% today on stronger Yen. Last week the Nikkei rose 2.5% and the stregth in Yen is likely to keep the equities pressured. However, there's important Support at 9900-10000 this week. The Hang Seng and the Straits are also trading lower by 1% today. The Shanghai (3004.31) has on the other hand has risen beyond 3000 today. It may face Resistance near 3050 (the 50% retracement of the recent fall from 3468 to 2639).
The Sensex (16264.30) has risen 3.67% last week and closed below the important channel Resistance near 16350 on the weely charts. A break past the Resistance this week could make it very bullish. But for today, we shall have to see whether it follows the Shanghai or the Nikkei. To see the chart of Sensex, click on: http://www.kshitij.com/graphgallery/sensexcandle.shtml#candle
Crude (68.41) fell sharply on Friday from the high of 72.90 following the concern over energy demand. Significant Support is seen at 68, a break below which might pull it down towards 65-63 in the coming days.
Gold (1003.30) closed above 1000 on Friday and is continuing to trade above 1000. Resistance is seen at 1015 a break above which might take it up towards the next significant Resistance seen at 1025. To see the Resistances on the Gold graph click on the following link:
The Yen's strength is the main story today. It is trading near 90.42. The USD-JPY low today has been 90.20. If this Support is broken, a further decline towards 88.50 would be at hand. The previous low is 87.15 seen in Jan-09. The Yen's strength is pulling the Euro-Yen (131.50) and Euro-Dollar (1.4545) down. The Aussie (0.8571) has also come off a bit from last week's high near 0.8680 and may ease further this week.
Needless to say, the Pound (1.6617) has dipped today, trading well below Friday's high near 1.6641. Dollar-Swiss (1.0395) has bounced a bit from Friday's low near 1.0340. The Korean Won is slightly weaker near 1226. Dollar-Rupee had closed near 48.47 on Friday. Expect a range of 48.35-55 today.
3M USD LIBOR was unchanged at 0.30% in Friday as compared to 0.45% a month earlier. The yields on US Treasuries have fallen last week. The 10Y yields have dipped 9 bps. Overall the yields have been falling over the last 4 weeks. The 10Y yields have corrected from 3.76% on 7th Aug to 3.33% today. There are chances of double top on the daily chart of 10Y benchmark yields. To see the chart, click on: http://www.kshitij.com/graphgallery/usdsin00.shtml#sin00 Lower yields on US Treasuries are beneficial to the home loan borrowers as their interest payments are linked to the 10Y benchmark yields.
Last week the BoE and BoC have kept the key interest rates unchanged at 0.50% and 0.25% respectively.
09:00 GMT EU Aug IND Prodn (MoM)
...Expected -0.3%...Previous -0.6%
JP GDP Q2'09 (Pre)
...Actual 0.6%...Previous 0.9%
EU EA (16) Curr Acct Bal Q1 '09 (2nd)
...Actual EUR -21.5 bln...Previous EUR -42.4 bln
EU EA (16) Bal of Trade in services (2nd)
...Actual EUR 8.8 bln...Previous EUR 0.8 bln
EU EA (16) Curr Acct Bal as % of GDP (2nd)
...Actual -1.0%...Previous -1.9%
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