Monday December 21, 2009 - 03:47:59 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 21-Dec-2009 - 0340 GMT
Last week saw some correction in the equities all across. The Dow closed 1% lower, the Nikkei 0.33% lower. Sharper corrections were seen in Shanghai and Sensex. The Shanghai had fallen over 4% and the Sensex nearly 2.5%. This week, a host of data releases out of the US may set the trend for the rest of the year. Among others, US GDP numbers on Tuesday and Personal Income on Wednesday would be the key data to watch.
The Dow continues to trade between 10250-10500 while the Sensex continues to face Resistance near 17400 and looks likely to come down towards 16300 over this week.
Crude (74.57) has risen sharply and is now trading higher above 74. The cold weather and the tension caused by the Iranian troops by seizing an Iraqi's oil well triggered the prices higher although the dollar remained stronger. If it continues to trade higher, we may see a rise towards 76 over the next few days. OPEC is expected to keep its supplies unchaged in its meet to be held tomorrow.
Gold (1116.20) is continuing to trade in the Support region 1120-00. Though a break below 1100 was seen in the intraday trades in the last couple of days, it has managed to close above 1100 which is keeping the broader bullish sentiment intact. A break and a close below 1100 might increase the chances of a further dip towards 1175-50.
Decemeber so far has seen some very handsome gains in the Dollar. Whether the Dollar will continue to strengthen or not is the big question going forward, but it is to be noted that it now faces some crucial, significant resistances. This is the last week of trading before X'mas. We assume most books would be square now and people might be wary of taking large positions.
A little bit of stability for the Euro (1.4344) seems to be coming in as the currency is bouncing off the 100-week Moving Average (1.4308). The Aussie (0.8876) has been more resilient and is currently finding Support at the 21-week Moving Average (0.8848). Dollar-Yen (90.48) has seen a good bounce on Friday, but is now coming up against an important Resistance at 91.11.
The Cable (1.6155) is trading weak, but just above range support at 1.6000. Dollar-Swiss (1.0425) had found resistance at 1.0500-10 over Thursday-Friday and has come off quite well from there, seeing a low near 1.0375 so far today.
In Asia, USD-SGD is steady near 1.4033, but faces important Resistance at 1.4100. Dollar-Won (1178.50) had seen a sell-off at 1189-90 over Thusday-Friday and has seen a low near 1170 so far today. Further dip is possible as the pair is essentially ranged between 1150-90. Dollar-Rupee had managed to close lower near 46.70 on Friday after an initial rise to 46.96.
3M USD LIBOR was set at 0.25%. The yields on US Treasuries have dipped slightly last week. While the 2Y yields dipped 3 bps, the 10Y yields fell 8 bps.
Today, the yields on Treasuries over 2Y are quoting nearly 5-6 bps higher. The 2Y and 10Y yields are quoting at 0.80% and 3.54% which is 5 and 6 bps higher respectively.
...Actual 0.10%...Previous 0.10%
Nov GER IFO Business Expectations
...Actual ...Previous 98.9
Nov GER IFO Business Situations
...Actual 90.5...Previous 89.1
Nov GER IFO Business Climate
...Actual 94.7...Previous 93.9
EU Trade Bal
...Actual 6.3 Bln...Previous 4.3 Bln
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