Friday December 18, 2009 - 03:35:08 GMT
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Morning Briefing : 18-Dec-2009 - 0333 GMT
The American stock indices fell nearly 1.25% yesterday. After having attempted a rise past 10500 over the last few days, the Resistance at 10500 pulled the Dow lower. It continues to range between 10250-10500 over last few weeks now. The unemployment claims' unexpected increase and FedEx's dispappointing forecasts called for a return to risk aversion.
The Asian indices are trading lower as well owing to risk aversion. The Shanghai (3117.67) is trading nearely 2% lower and the Nikkei (10059.74) is trading 1% lower. The Sensex which had closed flat yesterday might see a break below the Support at 16800 and may render itself bearish for 16400 over the next few trading sessions. Underperformance by the heavyweights like RIL has made the Sensex look sluggish over the last several days, thus allowing the Resistance at 17400 to be honoured.
Crude (73.08) has risen from yesterday's low of 71.21 and is now trading just above 73. The expectation of increase in demand and further fall in Crude inventories in the coming weeks because of the cold weather kept the prices higher even though the dollar remained strong. As mentioned earlier we might see a rise towards 75.50-76.00 in the coming days. On the downside Support is seen in 72.50-00 region.
Gold (1105.70), failed to withstand the divergence seen against the dollar over the last couple of days and fell sharply breaking below 1100 in the intraday trade before closing at 1107.40 yesterday. It is now trading in the Support region (1120-00) which we have been mentioning for sometime. A strong break below 1100 might pull further down towards 1075-50 in the coming days.
Strong gains were seen in the Dollar yesterday, but some of those gains have been given back today. Crucial Supports are being seen in most of the currencies now.
The Euro (1.4388) has bounced slightly after testing the 100-week Moving Average at 1.4311 yesterday. Further, there are important Fibonacci Supports at 1.43. While there is a danger/ chance of the market sentiment turning complete pro-Dollar, it might be important to note the technical Support at 1.43. Dollar-Yen (89.73) has been volatile, first falling to an early-Asia low near 88.88 from yesterday's high near 90.38, and then bouncing a bit from there. If the market remains above 89.35 now, a further rise towards 91 might be possible next week.
The Aussie (0.8894) dipped below the 100-day MA (0.8857) today to a low near 0.8810 and has bounced a bit from there. Strong Support is seen in the 0.8820-10 region now. The Pound (1.6201) fell sharply to a low near 1.6080 yesterday, but has bounced a bit from there. Decent medium term Support is seen in the 1.61-60 region now. Dollar-Swiss (1.0417) has fallen from yesterday's high near 1.05, reflecting the bounce in the Euro.
In Asia, the SGD had weakened to 1.4057 but has gained slightly to 1.4011 just now. Similarly, the Korean Won has retraced to 1175.20 after having weakened to as much as 1190 yesterday. Dollar-Rupee had seen a high near 46.96 yesterday, before closing near 46.88. It might see 47.10, but might dip from there.
3M & 6M USD LIBOR was set at 0.25% and 0.44% respectively. The yields on US Treasuries fell sharply yesterday owing to risk aversion that have set in once again causing the Treasuries to rise. The 2Y and 10Y yields fell 6 and 12 bps respectively and were quoted at 0.77% and 3.48% respectively.
09:00 GMT Nov GER IFO Business Expectations
09:00 GMT Nov GER IFO Business Situations
09:00 GMT Nov GER IFO Business Climate
...Expected 94.6...Previous 93.9
10:00 GMT EU Trade Bal
...Expected 5.7 Bln...Previous 6.8 Bln
CA Core Inflation Index Y/Y
...Actual 1.5% ...Previous 1.8%
Nov US Philifed Index
...Actual 20.4...Previous 16.7
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