Thursday April 15, 2010 - 03:40:13 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 15-Apr-2010 - 0338 GMT
The US Equities surged on account of strong numbers by JP Morgan and Intel Corp fuelling recovery hopes, yesterday. The Dow (11123.11, up 0.94%) and the Nasdaq (2504.86, up 1.58%) closed very near to the Resistance levels at 11100 and 2500 respectively and we need to wait and watch if these levels are broken or honoured in the coming days.
The Asian Equities are trading higher today. The Nikkei (11283.48, up 0.70%) may rise towards 11650-700 while above 11250 in the coming days. The Shanghai (3175.174, up 0.28%) may rise towards 3200-50 while above 3100 in the next few days. The Hang Seng (22289.54) is up 0.76%. In India, the equities were closed yesterday. The Sensex has been trading in the region of 17935-714 from the past few sessions and we continue to hold our view of a Resistance near 18100-300 in the coming days.
In Australia, the All Ordinaries (5035.500) is up 0.35%.
Crude (86.13) bounced back sharply and is now trading above 86. The EIA's data release that showed an unexpected fall of 2.2 million barrels in the US Crude inventories against the expected rise of 1.5 million barrels triggered the price rise. With Support at 84-83 region, the broader picture remains bullish for a rise to 88-90 in the coming days/weeks.
Gold (1158.30) is continuing to trade above 1150 and is keeping up the broader bullish sentiment intact for a rise to 1200-25. Support is seen at 1140-30 region.
The Asian currencies have strengthened further after the Singaporean revaluation yesterday. The USD-SGD trades lower near 1.3735 while Dollar-Won has also fallen to 1108.50. On the charts it looks like the Sing Dollar may re-test the level of 1.3447 seen in Jul-08. Dollar-Rupee was closed yesterday but might fall today on the global rise in Equities and on strength in the non-Dollar currencies. It had closed near 44.47 on Tuesday.
The Euro (1.3650) is maintaining its gains. The Pound (1.5495) has moved up further and is looking rather bullish, targeting 1.5640. The Aussie (0.9347) seems on its way to test the Nov-09 high of 0.9365. Dollar-Swiss (1.0515) trades lower, testing the 100-day Moving Average at 1.0503. The only non-Dollar currency to have weakened seems to be the Yen. Dollar-Yen had dipped to 92.80 initially in the US session yesterday, but has moved back up to 93.48 now. Strong buying interest is visible on dips and Dollar-Yen can target 96 in the longer term if it manages to rise past 94.75.
Overall, the Dollar has come under pressure over the last few days as "risk appetite" has comes back. But an eye has to be kept on the weakening Yen, as further weakness there could lend some Support to the Dollar all over again.
The 3M USD LIBOR was unchanged at 0.30%. The 2Y yield was down 1 bps to quote at 1.05% while the 10Y yield was up 3 bps to quote at 3.86%.
The ascending triangle seen on the 10Y TBond/JGB Differential chart is nearing for a breakout which would very significant in determining the trend going forward. To see the 10Y TBond-JGB differentials graph click on the following link:
UK Cons Conf
...Actual 72...Previous 81
09:00 GMT EU Trade Bal
Previous 8.9 Bln
13:00 GMT US Mar TICS (Net foreign purch of long-term Sec)
...Expected $ 20.3 Bln...Expected $ 19.1 Bln
13:15 GMT US Mar Industrial Production
...Expected 0.5%...Previous 0.1%
13:15 GMT US Mar Capacity Utilization
...Expected 73.3%...Previous 72.7%
14:00 GMT Mar US Philifed Index
...Expected 19.7...Previous 18.9
EU Feb IND Prodn (MoM)
...Actual 0.9%...Previous 1.7%
US Mar Retail Sales
...Actual 1.6%...Previous 0.5%
US Mar Core CPI (MoM)
...Actual 0.0%...Previous 0.1%
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