Friday January 29, 2010 - 03:40:01 GMT
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Morning Briefing : 29-Jan-2010 - 0338 GMT
The US markets closed in the red yesterday. The Dow (10120.46) closed 1.13% lower while the Nasdaq (2179) closed about 2% lower. Successful election of Bernanke was not enough to give respite to the markets, which declined heavily led by technology stocks. Today is the last trading day of the month and still no respite is visible.
The Asian Markets are mixed this morning. The Nikkei (10252.16) is down 1.56% and the Shanghai (3016.037) is up 0.73%. The Japanese markets have opened lower on account of high correlation with the US markets, further the concerns regarding the decrease in demands in the US (for Japanese exports) is further driving the markets down here. The markets here are highly dependent on the US markets and are expected to remain weak. The Sensex (16306.87) ended flat, erasing the gains through the day. The markets are driven by negative sentiments from retail as well as institutional investors and are expected to remain in the red today.
Crude (73.70) is continuing to trade lower. The stronger dollar and the demand concerns are retaining the downside pressure. If it continues to trade below 75, we might see further dip towards 72-71 in the coming days. To see the Crude graph click on the following link:
Gold (1082.10) is continuing to trade lower. Stronger dollar and concerns about the economic recovery are keeping the price lower. As mentioned earlier a break below 1080 might see further downmove towards 1065-60 which is a very significant Support region to be watched for on the downside. To see the Gold graph click on the following link:
The Euro (1.3940) continued to decline, as expected, to a low near 1.3915 today. A bit of short-covering rally may now be seen, with Support at 1.3855, but it might be short-lived. The sentiment is not pro-Euro, with Greece continuing to take a toll. The Aussie (0.8935) has also fallen and is threatening a reversal/ correction of its uptrend since the Oct-08 low of 0.6007. China's credit-rein-in alongwith the Yen's strength is the main reason for the weakening of the Aussie. Dollar-Yen (89.95) has again fallen below 90.00 after having risen to 90.55 yesterday.The chances of a fall towards 88.50 still exist.
The Pound (1.6145) felll sharply from yesterday's high near 1.6275, reacting badly to Standard & Poor's criticism of the UK's banking sector. Still, there may be Support at 1.6050, a 100 pips below current levels. Dollar-Swiss (1.0510) rose to a high near 1.0555 yesterday, in line with the fall in the Euro. Interestingly, although the Swiss Franc weakens alongwith the Euro, the Euro itself has been losing against the Swissy over the last several weeks.
Dollar-Won (1155.10) continues to find Resistance at 1165 for the while. USD-SGD (1.4050) continues to trade below the Resistance at 1.41, but might be gearing up for a rise past 1.41. Dollar-Rupee closed at 46.35 yesterday and that is where the NDFs are also quoting just now. Some Resistance seen at 46.45-50 for today.
3M USD LIBOR was unchanged at 0.25%. The yields on US Treasuries dipped yesterday. The 2Y and 10Y yields dipped 6 and 2 bps respectively to quote at 0.86% and 3.62% respectively as concerns over Greece budget deficit being 13% of GDP turned investors to safer haven, US debt.
In India, the RBI is expected to announce its interest rate decision today. Most market participants are of the opinion that one of the two key rates may be tightened, either the CRR or the Reverese Repo. The current CRR is at 5% and the markets have factored in a 50 bps hike in CRR.
09:30 GMT RBI Repo Rate
09:30 GMT RBI Reverse Repo Rate
09:30 GMT RBI CRR
10:00 GMT EU Unemp
...Expected 10.1%...Previous 10.0%
13:30 GMT US GDP Q4 '09 (Adv)
...Expected 4.5%...Previous 2.2%
13:30 GMT CA GDP
...Expected 0.3%...Previous 0.2%
EU Biz Climate
...Actual 97.1...Previous 92.0
Dec US Durable Goods Orders
...Actual 0.3%...Previous -0.4%
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