Thursday November 19, 2009 - 03:43:45 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 19-Nov-2009 - 0342 GMT
The Dow (10426.31) and the Nasdaq (2193.14) closed relatively flat yesterday as the markets continue to consolidate near the 13-month High. Yesterday's Housing Starts numbers fell by 10.6% and is being seen as drag on the economy. Nor was the future earnings forecasts by the technology companies any impressive. Traders are expecting the market to be in the range till the end of the year. In fact there can be profit booking near the current levels as investors might want to take home the gains from the 8-month rally ahead of the new year. The Resistance near 10400-10500 is hear to stay for some time.
The Nikkei (9584.01) continues to fall and seems to be the weakest among most of its counterparts. It is trading 0.96% lower today. It has fallen nearly 2% this week already. It having broken below 9650 is now likely to fall further towards 9400 over the next few days. The Shanghai (3292.92), too, is trading lower today. Expect it to rise towards 3500 over next few days. The Sensex (16998.78) saw some mild correction yesterday and may follow the cues from Asian indices and see from profit taking today as well.
Crude (79.40) has risen yesterday following the EIA's Crude inventory data release which showed an unexpected drop of 900K barrels against the expected 300K barrels. However, the fall in the housing starts data released earlier is still keeping the pressure on the hopes of the economic recovery. If Crude continues to trade above 79, a strong break above 80 might trigger fresh rally towards 84-85 in the coming day. A break below 79 might pull it down towards 77-76.50.
Gold (1143.30) has come off from yesterday's high of 1153.40. However, the broader picture remains bullish and we might see a rise towards 1175 over the next few days where some Resistance is seen. On the downside Support is seen in the 1120-00 region.
Profit-taking seems to be hitting most non-Dollar currencies, with the Aussie (0.9255) and Pound (1.6695) coming down quite a bit. The Euro (1.4925), Yen (89.14) and Swiss Franc (1.0124) are ranged. The Asian currencies have also weakened a bit. Dollar-Rupee has opened higher near 46.37 and is trading near 46.39/40 at the moment.
3M USD LIBOR was unchanged at 0.27%.
The Treasuries have little changed. The 2Y yields (0.77%) have been trading near the 9-month lows as traders believe that the US economy is growing too slow for the Fed to raise interest rates next year. The US has earlier announced that the interest rates shall not be raised for an "extended period".
The 10Y and 30Y yields are at 3.34% and 4.26%.
15:00 GMT Oct US Philifed Index
...Expected 12.5...Previous 11.5
UK BOE Minutes
...Actual 0-0-9 hold...Previous 0-0-9 hold
CA Core Inflation Index Y/Y
...Actual 1.8%...Previous 1.5%
US Oct Housing Starts
...Actual 0.53 Mln...Previous 0.59 Mln
US Oct Core CPI (MoM)
...Actual 0.2%...Previous 0.2%
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