Thursday April 8, 2010 - 03:38:23 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 08-Apr-2010 - 0335 GMT
The US Equities closed in the Red after an unexpected decline in consumer credit (borrowing fell by USD 11.5 bln) and renewed concerns over Greece, yesterday. The Dow (10897.52) was down 0.66% and the Nasdaq (2431.16) was down 0.23%. The Dow is near the strong Resistance region of 11000-100 and may face some difficulties moving up strongly from these levels in the next few days.
The Asian Equities are down today. The Nikkei (11203.90) is down 0.79%, the Shanghai (3142.326) is down 0.19% and the Hang Seng (21928.71) is flat. In India, the Sensex (17970.02) and the Nifty (5374.65) were up 0.16%, yesterday. The Sensex is near the Resistance region of 18000-300 and may not be able to break it easily in the coming days.
Crude (85.60) fell sharply breaking below 86 yesterday. The EIA's data release that showed an increase of 2 million barrels in US Crude oil inventories against the expected increase of 1.2 million barrels and the stronger dollar pulled down the price. While below 86, there are chances of further fall to 84-83 in the coming days.
Gold (1146.50) has risen sharply breaking above the upper end range (1080-1140) in which it has been trading over the last few weeks and recorded a high of 1154.20 yesterday. With Resistance-turned-Support at 1140-30, though there are good chances of further rise once again to 1200, the stronger dollar might still keep the price pressured and reduce the pace of the upmove. To see the Gold chart click on the following link:
Greece continues to cast a pall on the Euro (1.3325) which may see a slow decline from here, towards 1.3200-3150. Dollar-Yen (93.25) fell further yesterday, possibly pulled down by the Euro-Yen (124.30) and weakness in the Dow yesterday, which is being reflected in the Nikkei as well today.
The general feeling one gets is that there is no place worth investing, except perhaps Australia and Asia (ex-Japan). The Aussie (0.9278) continues to maintain its recent gains. A rise past 0.9300 might be very bullish. The Sing Dollar (1.3967) has started to weaken again, the USD-SGD bouncing off trend-Support near 1.3950. Dollar-Won (1122.20) has stabilised a wee bit yesterday, but retains its overall downtrend. The noise about the Yuan goes on in the background. Dollar-Rupee had moved up to 44.55 at Close yesterday and might rally further on global Equity weakness today.
In Europe, the Pound (1.5230) has moved up slightly yesterday, benefitting from the Euro's woes, perhaps. Dollar-Swiss (1.0740) remains bouyant, reflecting the weakness in the Euro.
3M USD LIBOR was raised by 1 bp to be set at 0.30%. The US Treasury yields fell sharply for the second straight day after having risen sharply over the last few weeks. The 2Y and 10Y yields fell 7 and 8 bps to quote at 1.06% and 3.87% respectively.
Greek Government yields premium (difference between Greek yields and 10Y Bund yields) have risen to the highest since the debut of Euro in 1999. It was recorded at 406 bps yesterday. Bloomberg reports show, CDS on Greek soverign debt has risen 12 bps to 404.5 bps. Today, the European Central Bank and the Bank of England are scheduled to announce their interest rate decision. The interest rates are expected to remain unchanged at 1.00% and 0.50% respectively.
Mar Australia Labour Force
...Actual 19.6K...Previous -4.7K
09:00 GMT EU Retail Sales
...Expected 0.0%...Previous -0.3%
11:00 GMT BOE Mtg
...Expected 0.50%...Previous 0.50%
11:45 GMT E-15 ECB Announcement
...Expected 1.00%...Previous 1.00%
...Actual 0.10%...Previous 0.10%
EU GDP Q4 '09 (Fnl)
...Actual 0.0%...Previous 0.1%
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