Tuesday December 22, 2009 - 03:28:42 GMT
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Morning Briefing : 22-Dec-2009 - 0326 GMT
The American stocks began this week with gains of nearly 1% on the major stock indices. A wave of mergers among corporates clubbed with analyst upgrades of Alcoa and Intel instilled confidence among investors driving the stocks higher. However, the range (10250-10500) for the Dow (10414.14) is likely to remain for some more time.
The Asian indices are trading higher. The Nikkei (10287.27) and Hang Seng (21184.12) are up 1% each while the Shanghai (3116.89) is trading a tad lower. The Sensex (16601.20) fell 0.7% yesterday and has ended lower for three days in a row. Further fall towards 16400 may be seen during the course of the week. For today, however, the Indian stocks may gain on global cues.
Crude (73.76) fell and closed below 74 yesterday following the stronger dollar and the partial removal of the Iranian troops from the Iraqi oil well easing the market tension which drove the Commodity price higher on Friday. Support is seen at 72.80. Immediate Resistance is seen at 74.10 a break above which might see a rise once again towards 75.30-50. OPEC is expected to keep the supplies unchanged in its meet today. The US Crude inventory data is due tomorrow.
Gold (1093.80) broke and closed below 1100 yesterday. The stronger dollar is continuing to keep the commodity price lower. If it continues to trade below 1100, we might see a downmove towards 1070-50 in the coming days.
Further surge in the Dollar (coupled with a surge in T-Bond yields on inflation expectations), especially against the Yen, with USD-JPY trading up near 91.45, above the earlier resistance at 91.15. Euro-Dollar (1.4287) has also fallen quite a bit, and is trading just below the 100-week Moving Average at 1.4307. Although the Yen and the Euro are trading very near these important chart points, the current pro-Dollar sentiment coupled with thin market conditions could push them lower against the Dollar.
The Aussie (0.8791) too has broken below a crucially important level of 0.8844 and may be vulnerable to a further fall towards 0.87 on a fall below 0.8750. The sentiment is weak unless the Aussie turns around to prove itself. At the same time, however, we might not see follow-through selling on the downside on account of the year-end market.
The Pound (1.6060) has been relatively more stable and is trading just above the 200-day Moving Average at 1.6022. Dollar-Swiss (1.0450) too has been relatively stable, although it has bounced a bit from yesterday's low near 1.04. See a range of 1.04-05 being maintained for a couple of days.
Dollar-Won (1183.10) has moved up quite a bit in Asia today and might test last week's highs near 1190. The Sing Dollar (1.4058) has weakened further, with the USD-SGD rising from a low near 1.40. The US Dollar faces an important Resistance at 1.4091-97. Dollar-Rupee had closed near 46.84 yesterday but might rally a bit towards 46.90-47.10 on the back of all-round Dollar strength today.
The 3M & 6M USD LIBOR was set at 0.25% and 0.43% respectively. The yields on US Treasuries have surged yesterday. The 2Y and 10Y yields rose 7 and 16 bps respectively to quote at 0.86% and 3.69% respectively.
There's Resistance on 30Y yields (4.57%) at current levels while the Resistance on 10Y yield is available near 3.80%. The yield differntials have been rising thus making the yield curve steeper. There are concerns that the GDP numbers scheduled today may indicate rising inflation. To look at the chart of USD Yield differentials, click on: http://www.kshitij.com/graphgallery/usddiff.shtml#sindiff
09:30 GMT UK GDP Q3 '09 (Fnl)
...Expected -0.1%...Previous -0.3%
01:30 GMT US GDP Q3 '09 (Fnl)
...Expected 2.8%...Previous 2.8%
15:00 GMT Nov US Existing Home Sales
...Expected 6.31 Mln...Previous 6.10 Mln
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