Wednesday April 28, 2010 - 04:19:49 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 28-Apr-2010 - 0417 GMT
Error Correction: Please ignore the earlier mail...
The US Equities fell heavily over Greece yesterday. The Dow (10991.99) was down 1.90% and the Nasdaq (2471.47) was down 2.04%. The Dow may fall further on a weekly close below 11100.
All Asians are in the Red today. The Nikkei (10935.99, down 2.47%) may find some Support at 10700, a weekly close below which may take it down towards 10400 in the coming days. The Shanghai (2892.60) is down 0.53% and the Hang Seng (20939.48) is down 1.51%. In India, the Sensex (17690.62) was down 0.31% and the Nifty (5308.35) was down 0.26% yesterday. The Sensex may trade in the range of 17300-800 before a break on either side is visible.
In Australia, the All Ordinaries (4845.40) is down 1.38% today.
Gold (1167) has jumped up on the risk aversion and safe-haven response of investors to the worsening Greece-Euro crisis. A test of 1180 is possible, where profit-taking could set in. Crude, on the other hand, has declined sharply to 82.32. Copper has also fallen overnight, suggesting dangers that the European crisis could negatively impact the global recovery.
Dramatic fall below 1.32 in the Euro (currently 1.3203) yesterday, leading to a low near 1.3159 today. The charts are not indicating any sizeable recovery and further fall is possible. The Greek-European crisis does not seem to be nearing a resolution. Wiith Germany playing hardball, things seem to be getting worse. The Dollar and the Yen have gained the most as a result. Dollar-Yen (93.20) fell to a low near 92.80 yesterday, severely denting our hopes of a rise to and past 94.75. The strength in the Yen brought the Aussie (0.9208) crashing down as well, to a low near 0.9132 yesterday. Aussie's failure to capitalise on the Euro's weakness is worrying.
The Pound (1.5267) also fell yesterday to a low near 1.5224 (from a high near 1.5483), but it has beein gaining visa-vis the Euro. The EUR-GBP trades near 0.8645 as compared to 0.9129 on 15-March. Dollar-Swiss (1.0855) has risen well past 1.08 and may be on its way to 1.10 now.
In Asia, the Korean Won (1117.10) and Sing Dollar (1.3717) have both weakened quite a bit from yesterday's levels. A rise past 1.3750 in USD-SGD may suggest the end of its long decline since 1.4255 in February. Note that the Brazilian Real (1.7720) has weakened substantially from 1.7420 on Monday and can weaken further towards 1.79. Dollar-Rupee may well move up towards 44.55-60 in the current situation.
The 3M USD LIBOR was up 1 bps to be fixed at 0.33%. The 2Y and 10Y yields were down 4 bps and 9 bps to quote at 1.00% and 3.70% respectively.
FOMC Meeting is due today.
AU CPI q/q
...Actual 0.9%...Previous 0.5%
18:15 GMT US FOMC Interest Rate
...Expected 0.25%...Previous 0.25%
AU PPI q/q
...Actual 1.0%...Previous -0.4%
13:00 GMT US Case Shiller
...Actual 0.6%...Previous -0.7%
14:00 GMT US Cons Conf
...Actual 57.9...Previous 52.3
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