Wednesday February 17, 2010 - 03:40:42 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 17-Feb-2010 - 0338 GMT
The US equities opened with a bang yesterday after an extended weekend. The Dow (10268.81) and the Nasdaq (2214.19) surged 1.68% and 1.40% respectively on general buoyant sentiments over the recovering economy. The Dow has reached an important Resistance zone which if held could lead to a fall towards 9800 over the next few days.
The Asian indices are celebrating the rise in US equities and the surge in commodities. The Chinese and Taiwanese markets are closed today as well. The Nikkei (10244.62) is up 2.10% and the Hang Seng (20610.31) is up 1.69%. The Sensex (16226.68) has reached an important Resistance zone of 16250-16300 that we had mentioned yesterday.
Crude (77.18) has risen sharply yesterday breaking above the Resistance at 75.50. The weaker dollar and strong equities supported the price rise. Immediate Resistance is seen at 77.50 a break above which might see further rise towards 79.50-80 in the coming days. The US Crude inventory data will be released tomorrow (18-Feb-10).
Gold (1116.70) is continuing to trade above 1100 and recorded a high of 1121.90 yesterday. Weaker dollar is keeping up the prices higher above 1100. If it continues to trade above 1100 we might see a rise towards 1140 in the coming days.
The easing Greece situation and risk appetite returning witnessed a bounce back on almost all currencies. The Euro (1.3771) and the Aussie (0.9008) has broken above their singificant Resistance at 1.37 and 0.8930 respectively. Euro might rise towards 1.3830-50 today and Aussie might test its important Support-turned-Resistance at 0.9030 (21-Week-MA). Dollar-Yen has risen above 90 and the 55-DMA (currently at 90.58) is the immediate Resistance to watch for which has held during yesterday's rise.
Euro-Yen Cross (124.37) is also trading higher following the rise in Euro and Dollar-Yen. The Pound (1.5775) is trading near the Resistance at 1.58 a break above which might see 1.59 on the upside today. Swiss (1.0658) has fallen sharply breaking below 1.07. Significant Support is seen in 1.0630-00 region which we expect to hold.
The Korean-Won is trading near 1144.70. DOllar-Ruppee has closed at 46.21/22 yesterday and has opened lower at 45.9850/46.00
3M USD LIBOR was unchanged at 0.25%. The yields on US Treasuries, too, haven't changed much. The 2Y and 10Y benchmark yields were quoting near 0.81% and 3.67% respectively.
The yields on German Bunds have been declining as Greece's debt concerns are turning investors towards safe haven (German Bunds). The spread which the investors demand to hold Greek 10Y notes indtead of German 10Y bunds have risen by 13 bps to 323 bps. In comparison, this was at an average 57 bps in the last decade. To see the chart of yields on German bunds, click on the following link: http://www.kshitij.com/graphgallery/eursin00.shtml#sin00
09:30 GMT UK BOE Minutes
...Expected 0-0-9 hold...Previous 0-0-9 hold
09:30 GMT UK Unemp
...Expected 7.8%...Previous 7.8%
10:00 GMT EU Trade Bal
...Expected 4.2 Bln...Previous 3.9 Bln
13:30 GMT US Jan Housing Starts
...Expected 0.580 Mln...Previous 0.560 Mln
14:15 GMT US Jan Industrial Production
...Expected 0.7%...Previous 0.6%
14:15 GMT US Jan Capacity Utilization
...Expected 72.6%...Previous 72.0%
Jan UK CPI Y/Y
...Actual 3.5%...Previous 2.9%
US Jan TICS (Net foreign purch of long-term Sec)
...Actual $ 63.3 Bln...Previous $ 126.4 Bln
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