Tuesday January 19, 2010 - 03:36:47 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 19-Jan-2010 - 0335 GMT
The US equity markets were closed yesterday on account of Martin Luther's B'day. The Dow (10609.65) has still been facing Resistance at 10700. If this were to be broken on the Support of 10500, the next target would be 11000 over the next few weeks.
The Asian equities are trading mixed today. Whereas the Nikkei (10841.67) is trading almost flat, the Hang Seng (21379.16) is trading 0.31% lower and the Shanghai (3247.26) is trading 0.31% higher. The Sensex (which was trading flat in the early trades yesterday, rose nearly 1% and closed half a percent higher. There's Resistance at 17900-18000 overhead. A breach of this is likely to be very bullish on the index.
After five consecutive days of lower close, Crude (78.45) has closed higher above 78 yesterday. The weaker dollar supported the price rise. However, the easing cold weather and the concerns of economic recovery and the energy demand are expected to keep the prices pressured on the downside for sometime. Immediate Resistance is seen at 78.50, if it holds, 77.00-76.50 can be seen on the downside.
Gold (1137.80) is continuing to trade sideways. We may expect it to be ranged between 1120-1160 for some time with the broader outlook remaining bullish. 1100-1090 is the signifcant Support region seen below 1120.
The biggest mover today is the Pound (1.6405) which has risen to a high near 1.6420 in Asian trade today, on news yesterday that UK property prices have risen 0.4% (m/m) in January, an y-t-d rise of 4.1%. A further rise towards 1.6470 is possible for the Cable. The Euro (1.4389) has recovered from yesterday's lows near 1.4335. Watch Resistance at 1.4415 closely as it seprates the Euro from a healthier and a weaker life for this week and month.
Dollar-Yen (90.52) remains above the 90.50-00 Support region, but the situation is fragile, especially since the market is trading below the 200-MA on the 4-hour (90.88) today. A rise past 91.00 will be needed to forestall possibilities of a decline towards 88.77. The Aussie (0.9245) continues to languish, dampened by the strong Yen, but manages to retain its overall uptrend. Still, it might be vulnerable should USD-JPY decline.
Asian currencies remain strong, with the USD-SGD trading lower near 1.3882 and the USD-KRW trading near 1124.20. The Won seems to be gearing up for further gains. This is despite Asian equities trading relatively weak. The Indian Rupee had closed near 45.64 yesterday and has chances of strengthening further towards 45.55-45 today, within an overall range of 45.25-85.
3M USD LIBOR was unchanged at 0.25%. The US Treasury yields were flat yesterday as the US was on a holiday. The 2Y and 10Y yields were quoted at 0.88% and 3.68% respectively.
The US yields have been coming down since early Jan 2010. The 2Y and 5Y have fallen more than the 30Y bonds. This had led to the yield curve steepening once again. To see the graph of US yields, click on: http://www.kshitij.com/graphgallery/usdsin00.shtml#sin00 To see the graph of US yield differenial, click on: http://www.kshitij.com/graphgallery/usddiff.shtml#sindiff
09:30 GMT Dec UK CPI Y/Y
...Expected 2.6%...Previous 1.9%
14:00 GMT US Dec TICS (Net foreign purch of long-term Sec)
...Expected $ 30.3 Bln...Previous $ 20.7 Bln
14:00 GMT BoC Meeting
...Expected 0.25%...Previous 0.25%
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