Tuesday November 10, 2009 - 03:38:38 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 10-Nov-2009 - 0336 GMT
US stocks surged overnight and so have the Asian indices today morning. The Dow and the Nasdaq rose over 2% each setting aside the concerns of rising unemployment which has grown to 10.2%. The Dow faces Resistance next at 10400-10500. It has risen over 4.50% over the last 4 trading days and slight profit taking can come in once the Resistance region is tested.
The Asian indices, too, are rejoicing. The Nikkei (9970.10) is trading higher by over 1.64%. The Shanghai continues to rise silently and is now nearing an important Resistance at 3250-3300. The Sensex (16498.72) had risen over 2% yesterday and is now likely to move towards 18000 over the next couple of weeks.
Crude (79.08) has risen sharply and closed above 79 yesterday taking support from the weaker dollar and the Tropical Storm Ida that has forced to close the production in the Gulf Coast. As mentioned earlier we might see a rise towards 80-81 in the coming days. On the downside Support is seen at 77.
Gold (1102.60) is continuing to trade strong and recorded a high of 1111.70 yesterday as dollar weakened thereby increasing the Commodity's hedge value. Though it has fallen from yesterday's higher and is trading lower now, the broader picture continues to remain bullish for a target of 1150-1200. On the downside Support is seen at 1085.
Most currencies are maintaining their strength, but have not broken new ground over the last couple of days. This is unlike stocks and commodities which are at or near new highs for the year (Dow) or life (Gold). Some consolidation may be needed before the currencies break into new higher territory.
The Euro (1.4985) saw a high near 1.5020 yesterday. Last month's high of 1.5060 is the resistance to be watched. Similarly, the Aussie (0.9285) saw a high near 0.9325 today, just shy of the Oct-09 high of 0.9330. It may dip a bit today before eventually moving higher. The Pound (1.6749) had soared to a high near 1.6845 yesterday, but has dipped a bit from there. It has important Supports at 1.67 and 1.6635.
Dollar-Yen (89.96) has been spending time below 90.30 since yesterday. Whether Support at 89.50 will hold or break is the debate in front of the market today. The Euro-Yen Cross (134.75) is holding onto its gains after having bounced from the 133.20-40 region yesterday. Further gains towards 136 are possible. Dollar-Swiss (1.0092) has bounced a bit from yesterday's low near 1.0054. Whether the Oct-09 low near 1.0030 can be broken immediately or not is the question at hand.
The Rupee can gain a little more towards 46.30-20 today on stock market gains. The 1-mth NDFs are quoting near 46.31-36 as compared to yesterday's close near 46.45. The Korean Won and Sing Dollar are strong at 1161 and 1.3885 respectively. The USD-SGD had seen a new -2009 low near 1.3840-35 yesterday. Wall Street Journal reports that a World Bank economist (a Mr Lin) has called on the world to lay off asking China to strengthen the Yuan.
3M USD LIBOR was left unchanged at 0.27%. The US Treasuries, too, have changed little yesterday. The 2Y and 10Y note yields were quoting at 0.86% and 3.50% respectively.
Over the last few months, the yields of G3 countries have been stable and are moving sideways. The 10Y Bund-Bond differential is stabilising between -0.1 and -0.2. To see the chart of Bund Bond differential, click on: http://www.kshitij.com/graphgallery/eurusddiff.shtml#eurusd
09:30 GMT UK Trade Balance
...Expected $ -6.1 Bln...Previous $ -6.2 Bln
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