Thursday March 4, 2010 - 03:38:37 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 04-Mar-2010 - 0335 GMT
The US Equities closed flat yesterday. The Dow (10396.76) and the Nasdaq (2280.68) opened higher following an upbeat report on Service industries and more takeover news; but the Markets erased the dayâ€™s gains after an announcement of slow economic recovery by the Fed. The Dow has an immediate resistance in 10500-50 region, and may rise to 11000 if this resistance is broken.
The Asian Equities are trading flat today. The Nikkei (10250.18), the Shanghai (3090.67) and the HangSeng (20904.37) have not seen any major movement this morning. The Sensex (17000.01) gained 1.36% yesterday. The markets have gained about 4.5% in the last three trading sessions following the Union Budget. The Sensex has a resistance near 17500-600.
Crude (80.90) rose sharply breaking above 81 in the intraday trades and closed just below the Resistance at 81. Though the EIA's data release showed an increase in US Crude inventories, the weaker dollar and better than expected economic data supported the price rise. If the current upside momentum continues, a strong break above 81 might see further rise towards 83.00-50.
Gold (1138.20) continued its upmove as the dollar weakened and closed above 1140 yesterday. It is now trading below 1140 now. Though it is trading well within the 1100-50 range which we have been mentioning for some time, a weekly close above 1140 might increase the chances of seeing higher levels going forward.
This has been a week of profit-taking on old Dollar Longs so far, but buyers might start coming in again in a couple of days.
Further "weakness" has been seen in the Dollar overnight, with the Euro (1.3710) printing a high of 1.3735. A further rise to 1.3780-90 is possible today. Dollar-Yen (88.45) has also contnued to weaken and might test 87.90 if immediate Support at 88.35 breaks. The Pound (1.5090) has also continued to bounce/ rally, but may hit Resistance at 1.5170 today. Dollar-Swiss (1.0675) had dipped to 1.0650 overnight and might bounce a bit to 1.0735-65 over today-tomorrow. The Aussie (0.9046) is testing and attempting to rise past the 100-day MA at 0.9065, as economic data continues to be good for the Aussie.
The markets might be a little quiet today ahead of the ECB and BOE meetings. The EU GDP is another important data release today.
In Asia, the Won (1143) has stabilised/ weakened slightly as compared to the low of 1139.40 for USD-KRW yesterday. The Sing Dollar (1.3988) continues to strengthen however and might gain further towards 1.3920. Dollar-Rupee had closed at 45.8250 yesterday and has chances of dipping towards 45.75-65 over the course of the day today.
The 3M USD LIBOR was unchanged at 0.25%. The 2Y and 10Y benchmark yields rose 2bps and 1bps to quote at 0.81% and 3.62% respectively.
The BOE and ECB are scheduled to meet today.
Feb Australia Trade Balance; Exp A$ -1.57 Bln, Prev A$ -2.17 Bln (revised), Act A$ -1.18 Bln
10:00 GMT EU GDP Q4 '09 (Pre), Exp 0.1% , Prev 0.1%
12:00 GMT BOE Mtg 0.50% 0.50%
12:45 GMT E-15 ECB Announcement 1.00% 1.00%
AU GDP QoQ(4th Quarter) Exp 0.9% 0.3% 0.9%
UK Cons Conf; Exp 71, Prev 74, Act 80
EU Retail Sales; Exp -0.3%, Prev 0.5%, Act -0.3%
US ADP Emp; Exp -9K, Prev -60K (revised from -22K), Act -20K
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