Wednesday October 14, 2009 - 03:41:36 GMT
Share This Story
FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 14-Oct-2009 - 0336 GMT
The Dow (9871.06) and the Nasdaq (2139.89) recovered after an early fall yesterday to close flat. US Retail Sales numbers are scheduled to be announced today. There's Resistance at 10100 and Support near 9700 this week.
The better than expected forecast from Intel helped Asian stocks rise led by electronics manufacturers which more than made up for the losses in financial stocks. The Nikkei (10051.13) is the only underplayer today which is down 0.25%. All the other major Asian indices are trading in the green. The Shanghai is up 1.80%, Hang Seng is up 1.07% and All Ordinaries (Australia) is up 0.76%. The Sensex (17026.67) which was closed yesterday because of Maharashtra Assembly Polls may open higher today. There's Resistance at 17400 this week.
Crude (74.87) is keeping up its strength on the upmove. The weaker dollar and the increase in the demand forecast for the year 2010 by OPEC boosted yesterday's rally. We might see a rise towards 76.50-80 in the coming days, if the current upside momentum continues. Note that 76.78 is the 38.2% retracement level of the fall from 141.27 (11-Jul-08) to 33.22 (15-Jan-09). The US Crude inventory data will be released tomorrow (15-Oct) instead of today.
Gold (1067.40) has broken above the Resistance at 1060 and is now trading higher. The weaker dollar is keeping up the strength on the commodity's upmove. As mentioned earlier we might see a rise towards 1150-1200 in the coming days/weeks. On the downside Support is seen at 1040.
Dollar-revulsion seems to be getting more acute with Gold rising above 1060. The non-Dollar currencies remain stronger and are getting stronger still. The Euro (1.4880) is likely to test 1.4930, where it faces a short-term Resistance. The Aussie (0.9108) is the world's favourite currency at the moment and looks set to accelerate further. Dollar-Yen (89.10) has fallen after rising to 90.45 on Monday and can fall further towards 88.00.
Retail traders are reported to be holding record Longs in Dollar-Yen and as such, there is room for decline in this pair. This is reflected in the Euro-Yen Cross (132.60), which has come off from 133.45 and threatens to fall towards 131.50.
The Pound (1.5938) has, surprisingly, shown a strong bounce from the low of 1.5710 yesterday and can rise towards 1.6030. Dollar-Swiss (1.0199) continues to fall and is within kissing distance of the previous low of 1.0193. A break below that can increase talks of "parity" at 1.00.
In Asia, the Sing Dollar (1.3958) and the Korean Won (1165.80) are strengthening again after having seen a bit of correction since Friday. Dollar-Rupee was closed yesterday. The last quote on Monday was near 46.48/50. We look for a test of 46.20 again today.
3M USD LIBOR was unchanged at 0.28%. The TED Spreads which is a measure of the willingness of banks to lend to each other is quoting at 22 bps. The yields on US Treasuries fell between 4-6 bps for maturities over 2Y.
The 10Y-2Y yield differential has been rising and is at 2.46% points. The yields seems to have now moved into a consolidative range and expect it to be ranged over the next several days as Fed is committed to keep interest rates lower while the markets are looking for a rise in interest rates.
04:00 GMT BOJ Meeting
...Expected 0.10%...Previous 0.10%
10:00 GMT EU Sep IND Prodn (MoM)
...Expected 0.9%...Previous -0.3%
12:30 GMT US Sep Retail Sales
...Expected -2.0%...Previous 2.7%
Apr UK CPI Y/Y
...Actual 1.1%...Previous 1.6%
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."