Tuesday May 4, 2010 - 03:49:19 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 04-May-2010 - 0346 GMT
The US Equities were up yesterday. The Dow (11151.83) was up 1.30% and the Nasdaq (2498.74) was up 1.53%. On the Dow, we would have to wait and watch whether the Resistance at (11100-200) is honoured or broken in the days ahead.
The Asian Equities are a little bearish today. The Shanghai (2856.33) is down 0.50% and the Hang Seng has also come down just now. The Shanghai has broken below the Longterm trendline Support on the weekly candles (1) and may fall towards the 2750-00 in the next few weeks (2). To see the Shanghai charts, click on the following links:
Japan is closed on account of Greenery Day today. In India, the Sensex (17386.08) was down 0.98% and the Nifty (5222.75) was down 1.05% yesterday. In the coming weeks, the Sensex may fall towards 16500 on a weekly break below 17500.
In Australia, the All Ordinaries (4775.70) is down 0.65% today.
Crude (85.97), tested the Resistance at 87 mentioned earlier and has come off from the high of 87.15. As mentioned earlier, while 87 holds we might see a pull back to 85-84 in the coming days. However, the broader picture remains bullish for a rise towards 90+ levels. To see the Crude graph click on the following link:
Gold (1180.30) is continuing to trade higher. Though the Resistance at 1180-85 region has held during yesterday's rise, the broader picture remains bullish for a rise towards 1200-50 in the coming weeks. To see the Gold graph click on the following link:
Dollar-Yen (94.95) has finally risen past 94.65-75, a major resistance that was holding it down. This signals a very momentous change in trend that can target 97, even 100 in the longer term and impact many other currencies and markets. Euro-Yen (125.25) has been pulled up from yesterday's low near 124 and could rise further. This is despite the continuing weakness in the Euro, which is trading lower near 1.3195. Some support could be seen in the 1.3155-15 region today.
Surprisingly, the Aussie (0.9245) has not gained on the Yen's weakness, remaining ranged below 0.93. Perhaps it is awaiting the RBA decision today on whether or not to raise rates again today. Overall, therefore, today's weakening of the Yen testifies to the growing strength of the US Dollar, rather than any other currency.
Dollar-Swiss (1.0855) is holding onto its gains and looks good for a rise towards 1.10 in the medium term. The Pound (1.5250) is quiet just now after having dipped a bit from 1.5300 yesterday. Expect an overall range of 1.51-57 in the coming weeks despite the election results at the end of th week.
In Asia, Dollar-Won (1114.20) is trading a little lower after having rallied to 1120 yesterday. The outlook is mixed - neither very bearish nor very bullish. USD-SGD trades quiet near 1.3705. Dollar-Rupee could dip a bit towards 44.45 after having closed near 44.5150 yesterday.
The 3M USD LIBOR was unchanged at 0.35%. The 2Y and 10Y yields were up 3 bps and 2 bps each to quote at 0.99% and 3.68% respectively.
The RBA's interest rate decision is due today. Market expects another 25 bps hike.
The BOE has postpond its meet from this Thursday (06-May-10) to next Monday (10-May-10) due to the election.
04:30 GMT AUD RBA Interest Rate
...Expected 4.50%...Previous 4.25%
US Mar Personal Income
...Actual 0.3%...Previous 0.0%
US Mar PCE Price Index M/M
...Actual 0.6%...Previous 0.3%
Apr US Manufacturing ISM
...Actual 60.4...Previous 59.6
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