Tuesday April 6, 2010 - 04:24:54 GMT
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Morning Briefing : 06-Apr-2010 - 0420 GMT
The US Equities closed up yesterday. The Dow (10973.55) closed up 0.43% and the Nasdaq (2429.53) closed up 1.12%. The Dow is now very close to the Resistance near 11000-150 and may consolidate after breaching 11000 for a few days before moving towards 11400 in the coming weeks.
The Asian Equities are mixed today. The Nikkei (11292.83, down 0.41%) may rise towards 11550-600 and the Shanghai (3166.618, up 0.27%) may rise towards 3275-300 in the coming weeks. The Hang Seng (21537.00) is up 1.40%. In India, the Sensex (17935.68) was up 1.37% and the Nifty (5368.40) was up 1.47% yesterday. The Sensex rose to its highest levels since Jan-08 and may face some Resistance near 18100-300 in the coming days.
Crude (86.43) is continuing to trade strong. The optimism on the economic recovery following the better US economic data released over the last week is supporting the price rise. With no major immediate Resistances seen on the upside, there good chances of further rise to 90+ levels in the coming days. Note 89.99 is the 50% retracement level of the fall from 147.27 (11-Jul-08) to 32.70 (20-Jan-09). To see the Crude graph click on the following link:
Gold (1128.60) has come off from yesterday's high of 1133.30. The outlook remains mixed now and a breakout of the range (1080-1140) in which it has been trading over the last several weeks might determine the further direction of move.
Good overnight drop in the Euro (1.3425) on fresh concerns about Greece being able to complete its $32 bln borrowing programme. May find Support near 1.3365 today. Profit-taking being seen in Dollar-Yen (94.18) which had hit a Resistance near 94.78 on Friday, the 21-month Moving Average. See danger of dip to 93.40 in a couple of days. The Euro-Yen Cross (126.40) could also dip another 100 pips from here, brought down by both the EURUSD as well as USDJPY. Longer term picture favours further upside for Dollar-Yen and Euro-Yen, but after a dip from here.
The Aussie (0.9185) is struggling below Resistance at 0.9225-40 for some days now and may need to dip towards 0.9100 in order to attract more committed buying. The Pound (1.5235) has come off a bit from yesterday's high near 1.5320 in the general profit-taking, but might find buyers come in today. Dollar-Swiss (1.0670) has moved up well from yesterday's low near 1.0584, but might find Resistance near 1.0690-0700 today.
Dollar-Won trades lower near 1123.40 while USD-SGD is consolidating near 1.3975, with Support at 1.3950. Dollar-Rupee had fallen dramatically yesterday to close at 44.45. A further dip to 44.20 is a possibility, but note that the market is quite oversold now. The Sensex has some Resistance at 18100.
3M USD LIBOR was unchanged at 0.29%. The yields on US Treasuries rose further yesterday. The 2Y and 10Y yields were quoted 5 and 2 bps higher at 1.15% and 3.96% respectively.
The Reserve Bank of Asutralia is scheduled to announce a hike of 25 bps interest rates today and the BoJ is expected to announce its interest rate decision tomorrow.
Former Fed Chairman, Alan Greenspan and PIMCO's Bill Gross expect the US T-yields to rise and borrowing costs to increase as the US economy borrows record amounts to come out of the worst contraction since 1930. This despite a rise in the Dollar's share as reserve currency to 62.1% (for the world as a whole) compared with Euro's share which dropped to 27.4%. Possibly, the increase in US Dollar's share would be more because of Euro's debt concerns than on its own merit?
04:30 GMT AUD RBA Interest Rate
...Expected 4.25%....Previous 4.00%
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