Wednesday May 12, 2010 - 03:44:38 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 12-May-2010 - 0342 GMT
The US Markets held on to Mondays gains, yesterday. The Dow (10748.26) was down 0.34% and the Nasdaq (2375.31) was flat. The Dow may move in the range of 10500-11000 in the coming days.
The Asians are mixed today. The Nikkei (10464.80) is up 0.52%, the Shanghai (2638.01) is down 0.36% and the Hang Seng (20044.25) is down 0.51%. The Nikkei and the Shanghai are at very crucial Support levels on the weekly charts. In India, the Sensex (17141.53) and the Nifty (5136.15) were both down about 1.10%. The Sensex may fall towards 16500 in the coming days.
In Australia, the All Ordinaries (4606.80) is up 0.73% today.
Crude (75.85) has come off from yesterday's high of 77.68 as the Euro zone's debt concerns is continuing to retain the downside pressure. As mentioned earlier, 75-74.50 is a very crucial Support region to watch for and a break below it might pull it further down towards 70. With lack of upside momentum now, we see slightly a high chance of a down move to 70. However, we will have to wait and watch. The US Crude inventory data is due today.
Gold (1228.20) recorded an all time high of 1233.60 yesterday. It is continuing to trade higher and is keeping up our bullish sentiment intact for further rise to 1250. We might expect a pull back from 1250 as some Resistance is seen at this level. However, a break above 1250 might take it further up towards 1270-80. To see the Gold graph click on the following link:
The Euro (1.2640) remains weak, having seen a low near 1.2615 yesterday. No immediate succour in sight, but there may be Support between 1.26-25. The Pound (1.4908) has recovered a bit though, coming up from yesterday's low near 1.4720, gaining on news that David Cameron of the Tories is to be PM. Further gains are possible today.
Dollar-Yen (92.75) continues to trade below 93.00. The outlook is mixed/ consolidative, which might be good for some recovery/ correction in other currencies/ markets. Dollar-Swiss trades near 1.1114, lower than last Thursdays' high near 1.1246, but it may rally towards 1.12 today. The Aussie (0.8943) has weakened again, from a high near 0.8994 yesterday but may have Support at 0.8925.
Among the Asians, both the Won (1137.30) and the Sing Dollar (1.3845) have weakened quite a bit. We see Dollar-Rupee moving up towards 45.40 today, as compared to yesterday's Close near 45.30-33.
The 3M USD LIBOR was unchaged at 0.42%. The 2Y and 10Y yields were down 3 bps and 2 bps each to quote at 0.83% and 3.52% respectively.
Yields on Greek Bonds have plunged over the last two days, coming down to 6.89% yesterday. Yet, the Euro remains weak.
08:30 GMT UK Unemp
...Expected 8.0%...Previous 8.0%
09:00 GMT EU Apr IND Prodn (MoM)
...Expected 1.2%...Previous 0.7%
09:00 GMT EU GDP Q1'10
...Expected 0.1%...Previous 0.0%
12:30 GMT US Apr Trade Balance
...Expected $ -39.9 Bln...Previous $ -39.7 Bln
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