Monday January 11, 2010 - 03:58:08 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 11-Jan-2010 - 0338 GMT
Equities have shown strength last week despite mixed economic data. The Dow (10618.19) and the Nasdaq (2317.17) rose nearly 2% each even as the markets continue to find a clear direction for the ecnonomy for the 1st half of the year. Friday's NFP numbers out of US was disappointing. For more info, see the "Data Today" section below.
The Asian equities, too, have traded strong through the last week. The Nikkei (10798.32) which has traded strong near the end of last year has risen nearly 19% since Nov-09 lows. The Shanghai (3242.84), however, had fallen 2.5% while the Sensex (17540.29), in its 1st week of early market opening, had ended with moderarte gains last week. Today, the Asian indices are trading strong. The Nikkei is closed today on account of "Coming of Age Day".
Crude (83.37) is continuing to trade higher. The news of fire in a Canadian refinery and weak dollar is supporting the price rise. As mentioned earlier, we might see a rise towards 85-87 in the coming days. Support is seen in 82.00-81.85 region. To see the Crude graph click on the following link:
Gold (1153.50) has risen sharply today taking support from the weaker dollar which is keeping up the metal's hedge value. Immediate Resistance is seen at 1160 a break above which might see a rise towards 1185-1200 in the coming days. To see the Resistance on the Gold graph click on the following link:
The Dollar-Index (DXY) has seen a sharp decline to 77.07 from Thursday's high of 77.90. Strong surge in the Euro (1.4520) in Asia today, building on the upmove in the US session on Friday, following the disappointment from the NFP data. The Yen has also surged, with the USD-JPY down at 92.20, but has important Supports between the current level and 91.70. A further fall towards 90.80 would come into focus if 91.70 breaks. Note that the strong Resistance at 93.50 (200-day MA plus trendline) has held on the USD-JPY. The Aussie (0.9312) has also surged and is likely to test the Nov-09 high near 0.9408.
The beleagured Pound (1.6095) has also seen a fresh breath of life, bouncing from Thursday's low near 1.59, but there is Resistance coming up at 1.6140. Dollar-Swiss (1.0147) has also seen a sharp decline today and might find some Support at 1.0095.
Strong surge in the Asian currencies as well with USD-KRW and USD-SGD trading near 1118 and 1.3885 respectively. Dollar-Rupee had closed at 45.7550 on Friday and may well fall again today on all-round Dollar weakness.
The 3M LIBOR was unchanged at 0.25%. The yields on US Treasuries have fallen sharply for Treasuries between 2Y-5Y whereas moderately for Treasuries beyond 5Y. The Yields have moved higher all through last week. The 2Y and 10Y yields are quoting 7 and 2 bps lower at 0.95% and 3.80% respectively.
No major data release today
EU GDP Q3 '09 (Fnl)
...Actual 0.4%...Previous 0.4%
...Actual 10.0%...Previous 9.9%
Dec US NFP
...Actual -85K...Previous 4K
Nov CA Labour Force
...Actual -2.6K...Previous 79.1K
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