Wednesday September 16, 2009 - 03:37:21 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 16-Sep-2009 - 0335 GMT
Dow (9683.41) and Nasdaq (2102.64) rose 0.59% and 0.52% respectively led by manufacturers on Bernanke's comments that the recession was probably over. The Retail Sales numbers released yesterday showed a rise of 2.7% m-o-m and PPI showed a rise of 0.2% which furthered the optimism of a speedy recovery.
The Asian indices (except Shanghai) are trading higher on cues from the US overnight. The Nikkei is up 1.19% at 10339.43. Surprisingly, however, Shanghai (2977.23) is trading lower 1.86% after having risen sharply since the beginning of this month. The Sensex (16454.45) has risen yesterday and recorded a high of 16477.23 as the Resistance at 16500 held. This Resistance may not hold today and the next Resistance would be available near 17000.
Crude (70.27) rose sharply yesterday breaking above 70 and recorded a high of 71.19 following the better than expected US economic data (retail sales and producer prices) released yesterday. If it continues to trade above 70 we might see a rise towards 73.00-50 in the coming days. The US Crude inventory data is due today, a drop of 3 million barrels is expected.
Gold (1008.70) closed above 1000 yesterday, the third consecutive close above 1000. With the current momentum to continue we might see it moving up towards 1020-30 in the coming days. Resistance is seen at 1030 and we might expect a pull back from there. To see the Resistance on the Gold graph click on the following link:
Overnight Low on the Dollar Index was 76.40 and it currently trades near 76.50. A good part of the market is looking at 76.00 as a crucial Support for the Dollar. The Euro (1.4665) has surged against both the US Dollar and the Pound yesterday, seeing a high of 1.4685 against the Dollar and 0.8906 (currently) against the Pound which in turn has fallen to 1.6471 against the Dollar (as compared to 1.6744 last Friday).
The overall sentiment continues to be Dollar-negative and, it seems, Pound-negative as well.
Dollar-Yen (91.00) has come off again after rising to 91.65 yesterday. The pressure remains on the downside. Dollar-Swiss (1.0340) continues to slip lower. The Aussie (0.8650) continues to look strong. It has lost some ground to the Euro over the last few days, making the Euro the star performer this week.
In Asia, the Won has appreciated considerably to 1212.20. Crucial Support is coming up at 1202, though. The Sing Dollar is looking very strong at 1.4181 and threatens to strengthen further towards 1.4080. Dollar-Rupee had closed near 48.64 yesterday and is expected to range between 48.45-75 today, possibly with a downward bias.
3M USD LIBOR was lowered 1 bp to be set at 0.29%. The yields on US Treasuries remained flat. The 30Y yield is nearing an important Support near 4.1% while the chances of Double top on the 10Y yields is till there. But if 10Y yield rises above 3.50%, the double top formation may be defied. To see the chart of US T-yields, click on: http://www.kshitij.com/graphgallery/usdsin00.shtml#sin00
09:00 GMT EU Aug CPI (YoY)
...Expected 1.2%...Previous 1.3%
12:30 GMT US Aug Core CPI (MoM)
...Expected 0.1%...Previous 0.1%
12:30 GMT US Q4 Current Account Balance
...Expected $ -92 Bln...Previous $ -101 Bln
13:00 GMT US Aug TICS (Net foreign purch of long-term Sec)
...Expected $ 60.3 Bln...Previous $ 90.7 Bln
13:15 GMT US Aug Industrial Production
...Expected 0.7%...Previous 0.5%
13:15 GMT US Aug Capacity Utilization
...Expected 69.1%...Previous 68.5%
US Aug Core PPI (MoM)
...Actual 0.2%...Previous -0.1%
US Aug Core PPI (YoY)
Actual 1.7%...Previous -0.9%
US Aug Retail Sales
...Actual 2.7%...Previous -0.1%
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