Tuesday December 1, 2009 - 03:35:16 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 01-Dec-2009 - 0330 GMT
The American equities recovered a little yesterday to close the month nearly 5% higher. The markets shrugged all the worrying news from Dubai, low Thanksgiving weekend sales and threat of rising unemployment. There are rising concerns that Dubai Govt may not get guarantee Dubai World's loans and that default by the investment conglomerate does't look too far.
The Asian indices too have recovered some lost ground yesterday and are trading slightly lower today. The Nikkei (9256.67) is trading nearly 1% lower, the Hang Seng and Shanghai are trading flattish. The charts of Nikkei still point towards bearishness. The Sensex (16926.22) rose sharply yesterday after pleasingly surprising GDP numbers that came in at 7.9% against markets consensus of 6.2%. The Sensex has now recovered most of the losses suffered "post-Dubai debt" worries set in.
Crude (77.25) has risen yesterday following the weaker dollar and the confirmation from Abu Dhabi to extend some help to Dubai which has eased the market concern a bit. The futher developments on the Dubai situation would play a significant role in the price movement this week. Immediate Resistance is seen at 78, a break above which might see a rise towards 79.50-80. On the downside Support is seen at 74.
Gold (1179.20) is trading strong as the dollar continues to remain weak which is keeping up the metal's hedge value. We may expect it to test the immediate Resistance seen at 1200 in the coming days. To see the Resistance on the Gold graph click on the following link:
The Euro (1.5017) is continuing to trade above 1.50. Support is seen at 1.4980 and if it holds, we might see a rise towards 1.5100-50. Dollar-Yen (87.18) has risen as the emergency meeting called by BOJ has raised the speculation of the central bank's intervention. 87.50-70 in the next significant Resistance region seen for the pair. Euro-Yen (131.08) Cross has risen taking support from the rise in Dollar-Yen.If it contiues to trade above 131 we might see a rise towards 132.00-50.
The Pound (1.6433) is trading lower. If the immediate Resistance at 1.6480 holds, we might see a dip towards 1.6350-30 today. Swiss (1.0046) is continuing to trade lower and is keeping downtrend intact. Aussie (0.9168) is awaiting the RBA's interest rate decision today. 0.9210 is the significant Support-turned-Resistance for the pair.
3M USD LIBOR was left unchanged at 0.26%. The yields on US Treasuries have been coming down over the last few days. The 2Y and 10Y yields were quoting near 0.65% and 3.20% respectively.
In Australia, the RBA Meeting is scheduled for today in a few minutes from now. The market consesus is of a 25 bps rate increase. In Japan, the BoJ has called an emergency meeting today and markets are betting on an intervention in the currency market by the central bank. In India, the markets have started expecting a rate increase by the RBI given the better than expected GDP numbers and also on a precedent from its counterpart in Australia.
03:30 GMT AUD RBA Interest Rate
...Expected 3.75%...Previous 3.50%
06:45 GMT CH GDP
...Expected 0.3%...Previous -0.3%
10:00 GMT EU Unemp
...Expected 9.8%...Previous 9.7%
15:00 GMT Nov US Manufacturing ISM
...Expected 54.7...Previous 55.7
IN GDP Q2'09-'10
...Actual 7.9%...Previous 6.1%
...Actual 0.4%...Previous -0.1%
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