Wednesday November 25, 2009 - 03:47:21 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 25-Nov-2009 - 0342 GMT
The Dow and the Nasdaq have closed flat yesterday. The Resistance at 10500 on Dow is still holding. Till this holds, we could see the index trade sideways for some time. Yesterday US Q3 GDP numbers came in a tad lower than street expectations. Data showed that the economy grew 2.8% on an annualised basis in Q3 '10. A host of important US data releases today would be in focus. Among others, Personal income and Durable Goods Orders would be the most watched. Tomorrow, US markets would be closed on account of Thanksgiving Day.
The Asian stocks have traded lower yesterday, and are trading flat today. The Shanghai (3219.90) was among the worst performers which fell over 3.5% after warning from the regulators that the Chinese banks must comply with capital requirements. The regulators are concerned that the quantitaive easing has led to liquidity being channelised into stock markets and real estate which raise concerns of asset bubble. The Nikkei (9405.18) fell another 1% yesterday and found Support at the lower end of the channel. On a break of 9350, expect further fall towards 9250. To see the chart of Nikkei, click on: http://www.kshitij.com/graphgallery/nikkeicandle.shtml#candle
The Sensex (17131.08) corrected a little yesterday. A rise towards 17400 is likely to see some selling pressure. But beyond that 18000+ does not seem unlikely.
Crude (75.94) fell sharply yesterday following the US GDP data released yesterday that showed a growth rate of 2.8% in the third quarter against the 3.5% reported last month. If the current strength on its downmove continues, we might see it moving down 75-74 in the coming days. The US Crude inventory data is due today.
Gold (1174.40) is continuing to trade strong and a strong break above 1175 might take it up further towards 1180-85. If 1175 holds, we might see a pull back towards 1140-20.
Dollar-Yen (88.30) has seen a good fall since yesterday, to a low near 88.20 today. A test of 88.00 may be possible. At the same time, the Euro (1.4988) has moved up a decent bit over the last three days and should now test Resistance at 1.50. As a result, the Euro-Yen Cross (132.35) is ranged, trading just below the 200-day MA at 132.42.
The Aussie (0.9259) has moved up well from Friday's low of 0.9057 and can see 0.9325 today. The Pound (1.6615) is ranged, nothing much happening there. Dollar-Swiss (1.0076) has moved down, mirroring the rise in the Euro. A test of the previous low near 1.0045 is likely.
Sing Dollar is strong with the USD-SGD trading lower near 1.3838. The Korean Won (1156.20) has not fallen, however, and is trading higher than yesterday's close near 1154. This is a little strange and may need watching. Dollar-Rupee had closed at 46.3750. Inflows from QIP proceeds could keep it pressured to the downside.
The 3M USD LIBOR was quoted at 0.26%. The yields on US Treasuries continues to fall. The 2Y and 10Y yields wer quoting 5 bps lower each at 0.73% and 3.30% resectively after the Fed minutes which confirmed that the short term interest rates are likely to be near zero for an extended period.
"Most members projected that over the next couple of years, the unemployment rate would remain quite elevated and the level of inflation would remain below rates consistent over the longer run with the Federal Reserveā€™s objectives,ā€¯ the Fed minutes said.
09:30 GMT UK GDP Q3 '09 (Pre)
...Expected -0.3%...Previous -0.4%
01:30 GMT US Oct Personal Income
...Expected 0.2%...Previous 0.0%
01:30 GMT US Oct PCE Price Index M/M
...Expected 0.6%...Previous -0.5%
01:30 GMT Oct US Durable Goods Orders
...Expected 0.5%...Previous 1.4%
15:00 GMT Oct US New Home Sales
...Expected 408K...Previous 402K
Oct GER IFO Business Expectations
...Actual 98.9...Previous 96.8
Oct GER IFO Business Situations
...Actual 89.1 ...Previous 87.3
Oct GER IFO Business Climate
...Actual 93.9...Previous 91.9
US GDP Q3 '09 (Pre)
...Actual 2.8%...Previous 3.5%
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