Friday October 23, 2009 - 03:37:54 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 23-Oct-2009 - 0335 GMT
The Dow (10081.31) and the Nasdaq (2165.29) rose 1.33% and 0.68% respectively led by banking and consumer stocks. The corporate earnings and forecasts have been encouraging. Among the consumer stocks, Walmart sounded confident of strong growth going forward. The banks have assured that they weren't seeing as many loans go bad.
The Asian indices are also trading higher. The Nikkei (10330.43) has risen 0.62%, Shanghai (3100.47) has risen 1.61% and Hang Seng (22542.99) has risen 1.50%. The Sensex had fallen once again yesterday making it three days in a row. It seems to have broken out of the bullish wedge visible on the weekly charts on the downside and if that's true, we could soon see it fall towards 15800 over the next couple of weeks. However for today, there could be some bounce after a fall of 3.10% over the last three days. To see the chart of Sensex, click on: http://www.kshitij.com/graphgallery/sensexcandle.shtml#candle
Crude (81.07) contineus to trade above the 80 mark and can surge towards 89 over the next few weeks on the medium term Support of 76.50.
Gold (1060.60) has been consolidating between 1045-1070. Expect a break of this range on the upside targeting 1150-1200 over the next few weeks. A break of this range on the downside in not expected. However, if seen, it may be contained near 1030-1020.
The Euro (1.5030) saw a high near 1.5060 today while the Aussie (0.9276) has been consolidating below 0.93 since yesterday. The Cable (1.6658) continues to surge and has further room on the upside. Dollar-Swiss (1.0058) has fallen again to a new 2009 low of 1.0032. A test of Parity is more likely than not.
In the meanwhile, Dollar-Yen (91.65) has risen again, to yesterday's high near 91.72. Further advances are possible. Both the Dollar and the Yen are now the "carry" currencies for the world. The Euro-Yen Cross has surged to 137.75 just now. A test of 138.25 could induce profit-taking, which could impact the Euro as well. The German IFO is due for release today and might be the catalyst to trigger profit-taking.
In Asia, the Sing Dollar and the Won have strengthened a bit today after having dipped over the last few days. They are trading near 1.3930 and 1184 respectively. Dollar-Rupee had closed near 46.7450 yesterday after having seen a high near 46.82. The 1-mth NDF is trading at a small discount near 46.61, so we could see the Spot move down a bit today.
3M USD LIBOR was unchanged at 0.28%. The US Treasury yields have risen between 5-6 bps for maturities over 5Y. The 10Y benchmark notes were quoting at 3.44%. The 3M T-Bills have fallen sharply by nearly 2 bps to be quoted at 0.05%. Thus the TED Spread has risen to 23 bps.
08:00 GMT Sep GER IFO Business Expectations, Prev 95.7
08:00 GMT Sep GER IFO Business Situations, Prev 87.0
08:00 GMT Sep GER IFO Business Climate, Exp 92.1, Prev 91.3
08:30 GMT UK GDP Q3 '09 (Adv), Exp 0.1%, Prev -0.6%
14:00 GMT July US Existing Home Sales 5.39 Mln 5.10M
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