Tuesday October 6, 2009 - 03:38:34 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 06-Oct-2009 - 0334 GMT
The Dow (9599.75) and the Nasdaq (2068.15) rose yesterday by 1% each on better than expected growth from service industry in the US. The service index of ISM rose to 50.9 in September from 48.4 in August. The rise was led by financial and energy stocks after Goldman Sachs raised it rating on large banks. Technically, Dow has found some Support near 9500. There's a prominent Support at 9200 for the week.
The Asian indices are buoyant today. Hang Seng is up 0.88%, China is closed today as well. Nikkei (9675) is flat. It has some Support at current level. We shall have to see it this Support holds, else Nikkei can be very bearish targetting 9000. The Sensex (16866.41) saw some profit taking yesterday as it fell nearly 1.60%. We do not expect a significant slide from here. However, sharp surges may be accompanied by intermittent small profit taking.
Crude (70.37) broke and closed above 70 yesterday taking support from the US equities that closed 1.18% higher yesterday. As mentioned earlier Resistance is seen in the region 70.50-71.00, a break above which might see a rise once again towards 73.00-50 in the coming days. However a break below 70 might pull it down towards 68.00-67.50. The US Crude inventory data is due tomorrow.
Gold (1020.40) has risen sharply yesterday and is now trading just above the Resistance at 1020. If the current upmove continues we might see a rise towards the significant Resistance region 1030-1040. On the downside Support is seen at 1000.
The Euro (1.4692) and Aussie (0.8766) are continuing with their uptrend and are trading higher. Intraday Support is seen at 1.4630 for Euro and Aussie might test the Resistance region 0.8830-50 today. Dollar-Yen (89.10) has fallen and is trading near 89, thereby keeping up the downtrend intact. Support is seen at 88.50. The Euro-Yen (130.95) Cross is trading lower with Resistance at 131.50 which is keeping the pressure on the downside.
The Pound (1.5964) traded between 1.5900-1.6030 yesterday. The pair continues to remain bearish with strong Resistance at 1.6100. Swiss (1.0286) has broken below 1.0300 and is trading lower. It might test the Support region 1.0200-0175 today.
The Korean Won (1160) has fallen and might test the Support at 1157. Dollar-Rupee has opened at 47.28/30 today.
3M USD LIBOR was kept unchanged at 0.28%. The Treasuries have remained more or less unchanged. The 10Y Notes are quoting at 3.22% and 30Y Bonds at 4.01%.
We may expect the yields to come down along with slowing stimulus spending. However concerns that the world might want to shift away from Dollar as reserve currency might be disastrous for the Treasuries in the US and could see the yields soaring. There are already concerns that Gulf countries may stop using dollar in oil transactions and is seen as a significant step towards Dollar debasement.
Sep Australia Trade Balance
...Actual A$ -1.52 Bln...Previous A$ -1.78 Bln
03:30 GMT AUD RBA Interest Rate
...Expected 3.00%...Previous 3.00%
EU Retail Sales
...Actual -0.2%...Previous -0.2%
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