Tuesday October 20, 2009 - 03:38:41 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 20-Oct-2009 - 0336 GMT
The Dow (10092.19) and the Nasdaq (2176.32) rose one percent each yesterday as the Dow once again closed above 10000. Better earnings numbers are keeping the stocks buoyant and the investors confident of recovery being in sight. The Asian indices too are celebrating the rise in American equities overnight. The Nikkei is up 1.09% at 10347.58 and Shanghai closed above 3000 yesterday and is trading one percent higher today at 3068.63. The Sensex which was closed yesterday on account of "Bhaubeej" had closed over 4% higher last week.
Crude has surged over the last 2-3 days and have crossed the $ 80 a barrel mark. Next very important Resistance is at 89 which may be targetted over the next few weeks. Till it trades above 78, the chances of a surge towards 89 would be alive.
Gold (1065.20) has once again risen closer to the 1070 mark. Having been Supported near 1040 last week, it may go up towards 1090 over the next few days with a long term target of 1150-1200.
Another field day for the non-Dollar currencies as Dollar-revulsion continues to rule. The Aussie (0.9290) and the Euro (1.4980) are trading at their highest levels in the last 12 months and have room to rise further. Dollar-Swiss (1.0104) too is likely to inch closer to "Parity" with the Dollar in the coming days. Even a battered currency like the Pound (1.6405) has also bounced well over the last couple of days. It does face Resistance near the current levels, though.
Dollar-Yen (90.35) is trading lower after having found Resistance at 91.00 yesterday. A test of Support between 90.00-89.65 might be seen today. The Euro-Yen Cross (135.35) looks relatively bouyant, pulled up by the Euro.
The Asians remain strong but seem to be consolidating a bit against the Dollar, rather than accelarating against it. USD-SGD (1.3885) may have some Support at 1.3855. Dollar-Won (1166.40) has bounced a bit from Friday's low near 1150. Dollar-Rupee had closed at 46.30 on Friday and was closed yesterday on account of Bhai Dooj. The near month NDFs are quoting at a discount to Spot.
3M USD LIBOR continues to be at 0.28%, Having fallen sharply over the last three months from beginning of July, it seems to be now settling near this region. The yields on US Treasuries were little changed yesterday. The 2Y and 10Y yields are quoting at 0.97% and 3.40% respectively.
The 3M LIBOR differential between different currency pairs seem to be flattening and has not been changing much since March 2009. To see the chart, click on: http://www.kshitij.com/graphgallery/differential3.shtml#3mthdiff
Interest rate announcement of Bank of Canada is schedule for today.
12:30 GMT US Sep Housing Starts, Exp 0.620 Mln, Prev 0.600 Mln
12:30 GMT US Sep Core PPI (MoM), Exp 0.1%, Prev 0.2%
12:30 GMT US Sep Core PPI (YoY), Prev 2.3%
13:00 GMT BoC Meeting, Exp 0.25%, Prev 0.25%
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