Tuesday December 8, 2009 - 03:33:49 GMT
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Morning Briefing : 08-Dec-2009 - 0329 GMT
The Dow (10390.11) and the Nasdaq (2189.61) closed flat yesterday. Sideways range has been holding and till the Dow is not able to break above 10500, there are high chances of the range continuing to hold going forward till at least the end of the year. The stocks gave up their initial gains after Bernanke's comments that unemployment continues to be a cause of concern and that it would hold the economy onto a 'moderate' recovery track.
The Asian indices are trading lower. The Nikkei (10116.35) is down 0.50% and the Shanghai Composite (3283.97) is down 1.44%. The Nikkei has broken above an important Trendline Resistance this week led by weakness in Yen. Japan has announce a stimulus package of $81 bln to boost the waning recovery. The Sensex (16983.14) has been weak over the last 3 days and is likely to dip today as well on cues from its counterparts in the rest of Asia. There's Support at 16600 on Sensex for today.
Crude (74.20) continued its fall yesterday and recorded a low of 73.70 as the concerns on the energy demand kept the prices lower following the comments from Ben Bernanke that the economic recovery would not be as quick as was expected. Significant Support is seen in 73.50-30 region a break below which might pull it down towards 72.50-00. On the upside Resistance is seen at 76.50. To see the Crude graph click on the following link:
Gold (1166.60) has risen from yesterday's low of 1136.10 as Bernanke said that Fed could continue with low interest rates for an extended period. On the downside Support is seen in 1120-00 region which we expect to hold if it continues its current downmove as the broader picture still remains bullish.
The currency markets are a little quieter today. Both the Euro (1.4835) and the Aussie (0.9133) are quiet after having fallen substantially over the last two days. Both are expected to be rangebound for the rest of the year. A comparitively larger move has been seen in Dollar-Yen (89.10) which is trading lower today also after having fallen yesterday, from Friday's high of 90.78. A wide and wild range of 87.50-91.50 is envisaged for the rest of the year. The Euro-Yen Cross (132.20) has fallen alongwith Dollar-Yen and may be ranged between 130.50-134.50 going forward, instead of rising towards 138.
The Pound (1.6450) has recovered from yesterday's low near 1.6315 but still faces a danger of a fall towards 1.62 in the coming days. Dollar-Swiss (1.0193) trades a little lower than yesterday's high near 1.0246 and is expected to range between 1.0120-0320 for the rest of the year.
USD-SGD (1.3892) is trading quiet and a little lower than yesterday's high near 1.3930. Look for a range of 1.3950 on the upside and 1.3815 over the coming two weeks. Dollar-Won is also quiet near 1154.50. Dollar-Rupee had closed near 46.5950 yesterday and might remain below 46.60 today.
3M USD LIBOR was unchanged at 0.26%. The yields on US Treasuries have fallen after having risen sharply yesterday. The 2Y and 10Y benchmark yields are quoting 7 and 4 bps lower at 0.76% and 3.43% respectively.
Bernanke had indicated yesterday that the interest rates will continue to be low as the economy is likely to recover moderatly going forward. This has scrapped growing expectations of a rate increase sooner than expected.
The BoC meeting is scheduled today.
14:00 GMT BoC Meeting
...Expected 0.25%...Previous 0.25%
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