Friday October 9, 2009 - 03:34:27 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 09-Oct-2009 - 0332 GMT
The Dow (9786.87)and the Nasdaq (2123.93) rose 0.6% each overnight after some encouraging economic data release. The news from the employment side was encouraging (weekly unemployment claims dropped from 554K to 521K this week) and so were the corporate profits led by Alcoa. Fall in wholesale inventories also held out a promise of a recovery in perosnal spending.
The Asian indices are looking mixed. The Shanghai (2865.83) which has opened after a long halt is up 3.11% as it tries to assimilate the impact of events since the beginning of this month. The Nikkei (9891.66) is up 0.60%. It has risen on the Support of the fault line on the weekly candles at 9750. To see the chart of Nikkei, click on: http://www.kshitij.com/graphgallery/nikkeicandle.shtml#candle
The Sensex (16843.54) had closed relatively flat yesterday. There's Support on Sensex at 16500 and Resistance near 17300. We expect it to move higher towards 20000 by the end of 2009 or early 2010.
Crude (71.30) has risen sharply yesterday taking support from the weaker dollar and the US jobless claims that fell to 521,000 from the previous week's revised figure of 554,000. Trendline Resistance is seen at 72.50 which was tested yesterday (Note:72.55 was the high recorded yesterday).A break above 72.50 might take the Commodity up once again towards 75. To see the Trendline Resistance on the Crude graph click on the following link:
Gold (1048.90) is keeping up its upside momentum. Though it has fallen from yesterday's high of high of 1062.70, the overall outlook continues to remain bullish for a target of 1150-1200 with a strong Support in the region 1010-990.
A bit of profit-taking hits non-Dollar currencies. The Euro (1.4705) has dipped a bit from yesterday's high near 1.4818. The Aussie (0.9028) remains overall strong, although a little lower than yesterday's high of 0.9095. Dollar-Yen (89.15) has seen a decent bounce today, up from a low of 88.00 seen on Wednesday.
The Pound (1.6005) has fallen after having rallied to 1.6120 yesterday and remains bearish overall. Dollar-Swiss (1.0320) has bounced from yesterday's low near 1.0227 and might be ranged between 1.0220-0400 for a few days if the immediate Resistance at 1.0330 is broken.
Some consolidation is possible for the Euro, Aussie, Yen and Swissy within the overall bullish sentiment.
In Asia, the Sing Dollar (1.3915) is consolidating after having strengthened sharply to 1.3875 yesterday. The Korean Won (1167) is also looking quite strong. Dollar-Rupee had closed near 46.34 yesterday after having dipped to 46.21. The NDFs continue to indicate further strength for the Rupee, with the 1-mth and 2-mth NDFs quoting near 46.20 and 46.13 respectively.
3M USD LIBOR was unchanged at 0.28%. LIBOR seems to have now found a surface for itself. Some consolidation near these levels and the market could then be surprised with a sharp rise. But not until an "extended period of time". The USD yields have surged. The 10Y benchmark yield is quoting higher by 8 bps at 3.27% while the 30Y bond yield has taken Support of the trendline at 4.00%. To see the chart of USD yields, click on: http://www.kshitij.com/graphgallery/usdsin00.shtml#sin00
Bank of England, European Central Bank and Bank of Korea have kept key interest rates unchanged at 0.50%, 1.00% and 2.00% respectively. The Fed has made it clear that tightening of monetary policy shall take place only when economy improves "sufficiently", thus dampening expectations of a rate hike in the next FOMC meet.
08:30 GMT UK Trade Balance
...Expected $ -6.3 Bln...Previous $ -6.5 Bln
11:00 GMT Aug CA Labour Force
...Expected -6.7K...Previous 27.1K
12:30 GMT US Aug Trade Balance
...Expected $ -32.7 Bln...Previous $ -32.0 Bln
Sep Australia Labour Force
...Actual 40.6K...Previous -26.1K
...Actual 0.50%...Previous 0.50%
E-15 ECB Announcement
...Actual 1.00%...Previous 1.00%
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