Thursday January 28, 2010 - 04:13:13 GMT
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Morning Briefing : 28-Jan-2010 - 0340 GMT
The US equities rose yesterday. The Dow (10236.16) closed nearly half a percent higher and the Nasdaq (2221.41) nearly a percent higher after an upbeat economic assessment by the Fed brought some respite to the declining markets. There's important Support for Dow near 10000 which may not be breached in a hurry.
The Asian markets are trading mostly higher today. The Nikkei (10385.99) and the Hang Seng (20291.16) are trading 1.3% higher each while the Shanghai (2986.01) which has been the worst performer among the emerging markets this January is trading flat today. The Shanghai has fallen 9% in January. The Sensex (16242.30) crashed 3.21% yesterday and has seen a decline of 7% in January 2010. It has Support near 16100 for this week and should hold.
Crude (73.56) is continuing its downmove. Though the EIA's data release yesterday showed a drop in US Crude inventories, the unexpected increase in the gasoline stocks and distillate stockpiles which includes heating oil and diesel kept the price lower. The stronger dollar also added to the downside pressure. If it continues to trade lower we might see further dip towards 72.00-71.80 in the coming days.
Gold (1084.40) is continuing to trade below 1100. The stronger dollar is keeping up the downside pressure and pulled down the price sharply yesterday. 1080 is the significant immediate Support, a break below which might see further downmove towards 1065-60. As the broader outlook is bullish we might expect a bounce back from 1065-60 Support region. To see the Gold graph click the following link:
The Euro (1.3995) dipped to a low near 1.3935 in early Asia today, on continued worries about governmental finances in Europe. It tested the 200-week Moving Average, and has bounced a bit from there. Need to see how strong/ week this Support is. The Aussie (0.8974) dipped to a low near 0.8910 in the US session, reacting to lower commodity prices. That it is trading below 0.90 is worrisome for the Aussie. Dollar-Yen (90.32) has seen a strong bounce from the US session low of 89.15.
The Pound (1.6190) has risen well from yesterday's low near 1.61, which may be a good Support going forward. The British currency is looking stronger than the Euro, with the EUR-GBP (0.8645) likely to fall further towards 0.8540. Dollar-Swiss (1.0515) has come back a bit after a false rise past Resistance at 1.0540 to an early Asia high near 1.0555. Some more profit-taking is possible there.
In Asia, the USD-SGD (1.4040) is remaining below the crucial Resistance at 1.41, but the sentiment seems to be slowly turning pro-USD. Not only against the SGD, but against all currencies. Dollar-Won (1153.60) is also honouring an important Trend Resistance at 1165-67 for now. The rise in Dollar-Yen, alongwith the rise in the Nikkei and the fact that the Dow has closed above a crucial trendline Support might give some breather to Indian stocks and maybe to the Rupee. Watch Resistance at 46.50. The NDFs are quoting near 46.39/44.
3M USD LIBOR was unchanged at 0.25%. The yields on US Treasuries have risen sharply yesterday. The 2Y and 10Y benchmark Treasury yields rose 9 and 6 bps respectively to quote at 0.94% and 3.68% respectively.
The Fed has kept the interest rates unchanged and shall keep them near zero over an "extended period". It restated its intention of ceasing to buy $1.25 tln of mortgage-backed securities. The Kansas City Fed President, Thomas Hoenig, has dissented to Fed's decision of keeping interest rates near zero despite recovering economy.
10:00 GMT EU Biz Climate
13:30 GMT Dec US Durable Goods Orders
...Expected 2.1%...Previous 0.2%
...Actual 0.5%...Previous 1.0%
Dec US New Home Sales
...Actual 342K...Previous 370K
US FOMC Interest Rate
...Actual <0.25%...Previous <0.25%
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