Tuesday February 2, 2010 - 03:42:52 GMT
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Morning Briefing : 02-Feb-2010 - 0337 GMT
February has started on a good note for the US Markets. The Dow (10185.51) closed 1.17% higher and the Nasdaq (2171.2) closed 1.11% higher. The markets performed well on account of encouraging numbers from the US ISM and the US personal income. Please note that the Dow has honored the support at 10000 and has bounced back. The positive data releases have improved the investor sentiments and are expected to drive the markets positively in the days ahead.
The Asian markets have opened higher today. The Nikkei (10396.48) is up 1.88% and the Shanghai (2979.54) is up 1.30%. The markets have followed their US counterparts and are up on account of good numbers from the US data releases yesterday. The Shanghai, after breaking below the important support at 3000, has again come near the same levels. If manages to rise above the 3000 levels, it will be a significant improvement for the markets here. The Sensex (16356.03) closed flat after recovering the opening losses of about 1% yesterday. Today, the markets are expected to be up, following the rise in the global markets.
Crude (75.20) has risen sharply and is now trading above 75 following the better than expected US manufacturing data which has eased the concerns about the economic recovery and energy demand. Though the chances of a downmove that we were looking towards 72-71 is less now, the Resistance in 76.25-50 region should be watched for to get the clear direction of move in the coming days/weeks. To see the Crude graph click on the following link:
Gold (1104.30) is back once again above 1100. The better than expected US manufacturing sector growth, a slight pause in dollar strength supported the price rise. If it contiues to trade above 1100, we might see 1120-40 on the upside in the coming days.
Hobbled by the Greece factor, (its budget plans are to be scrutinised by the EU today), the Euro is being unable to stage a decent bounce. The Euro (1.3910) remains in the shallows and in a strong downtrend despite the rally in Equities in the US yesterday and in Asia today. The Aussie (0.8910) is also in a downtrend with resistance at 0.8950, ahead of the RBA meeting results today, where the market has factored in a 25bp hike. A rise past 0.8950 would be bullish, though. Dollar-Yen (90.85) has risen well through yesterday and today, trading sidwways within a range of 88.50-91.50.
The Pound (1.5957) fell to a low near 1.5850 yesterday despite data showing that manufacturing rose the strongest in 15 years, last month, January. The market is probably taking an extreme position ahead of the BOE meeting tomorrow, and might be gearing up for a bounce. Even the ECB is slated to meet tomorrow. The Swiss Franc (1.0583) showed a slight recovery from Friday's high of 1.0645 for USD-CHF. The overall trend remains Dollar-positive, though, with Support at 1.05.
Asian currencies have reacted well to the rise in Equities today. The Sing Dollar has recovered slightly to 1.4095 from yesterday's weak level of 1.41. A fall below 1.4050 could bring the US Dollar down towards 1.40 also. Dollar-Won (1157.30) has also come off a bit from yesterday's high near 1174.80. We are on wait and watch mode to see whether the Asians gain further or not. Dollar-Rupee had closed at 46.37 yesterday. The NDFs are quiet, trading near 46.38/43 and as such we might see a dip to 46.30 today.
3M USD LIBOR was unchanged at 0.25%. The 2Y and 10Y yields rose 3 bps and 6 bps respectively to quote at 0.87% and 3.66%.
Today, the Resreve Bank of Australia has kept the rates unchanged at 3.75%.
AUD RBA Interest Rate
...Actual 3.75%...Previous 3.75%
US Dec Personal Income
...Actual 0.4%...Previous 0.4%
US Dec PCE Price Index M/M
...Actual 0.2%...Previous 0.5%
Jan US Manufacturing ISM
...Actual 58.4...Previous 54.9
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