Thursday October 29, 2009 - 03:48:52 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 29-Oct-2009 - 0340 GMT
The stocks continued to slide worldwide. The Dow (9762.69) has fallen nearly 3.16% over the last 4 trading days. It fell over a percent yesterday. There's prominent Support on Dow only near 9500. An unexpected decrease in New Home Sales released yesterday have raised concerns whether the recovery in stocks has happened too soon.
The Asian indices are trading lower as well. The Nikkei (9879.37) has fallen nearly 4.65% over the last 3 trading days. It has major Support near 9800 both on the weekly and the daily charts. To see the chart of Nikkei, click on: http://www.kshitij.com/graphgallery/nikkeicandle.shtml#candle
Shanghai (2987.53), too, has corrected nearly 4% this week and the Sensex (16283.49) nearly 3.2%. Further losses in Sensex are being indicated by global markets this morning. There's strong Support near 15800 on Sensex.
Crude (77.21) fell sharply yesterday breaking below the Support at 77.50 mentiobed earlier following the EIA's data release that showed an unexpected increase in the gasoline stocks (1.7 million barrels) which is keeping up the worries about the energy demand and the economic recovery. The Crude inventories were up by 800,000 barrels which was less than expected. If it continues to trade lower, we might see a downmove towards the Support region 76-75.
Gold (1031.90) broke below 1030 and recorded a low of 1026.90 yesterday. The strengthening of dollar is keeping up the downside pressure on the Commodity. As mentioned earlier significant Support is seen in the region 1030-20. If the current downside momentum continues, a break below 1020 might pull the Commodity down towards 1010-1000.
Most non-Dollar and non-Yen currencies have taken another big beating and might have a wee bit more to loose today. But, the corrective fall in the high-yielders should be nearing its end and these currencies may run into buying interest over today-tomorrow. The Euro (1.4715) has Support near 1.4665 although the Aussie (0.8965) can potentially drop another 100 pips to 0.8865.
Dollar-Yen is down to 90.30 and can fall further in the days ahead. This could be a drag on the Euro and Aussie. The Pound (1.6365) has been steady over the last 4 days but can fall towards 1.62 or lower. Dollar-Swiss (1.0260) mirrors the Euro and has important Resistance at 1.0310.
Dollar-Sing is trading higher near 1.4037, but has important Resistance on the Weekly charts right here. USD-KRW trades higher near 1200.50. Dollar-Rupee had closed near 47.33 but could move up to 47.80-90 today as the NDFs are trading higher.
3M USD LIBOR was unchanged at 0.28%. The US yields fell today as well after investors returned to US Treasuries on risk aversion. The 2Y and 10Y yields fell 4 and 3 bps respectively to quote at 0.94% and 3.41%,
RBA is scheduled to meet early next week. Expectations of a further rate increase by the RBA has decreased as the inflationary pressures seem to be under control. Earlier this month RBA became the first among G-20 nations to increase the interest rates by 25 bps. Since then the markets have been expecting another increase next month. The chances of sucha an increase are now lower.
12:30 GMT US GDP Q3 '09 (Adv)
...Expected 3.1%...Previous -0.7%
...Actual 1.0%...Previous 0.5%
US New Home Sales
...Actual 402K...Previous 417K
US Durable Goods Orders
...Actual 1.0%...Previous -2.6%
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