Friday May 14, 2010 - 03:50:39 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 14-May-2010 - 0348 GMT
The US Equities were in the Red yesterday. The Dow (10782.95) was down 1.05% and the Nasdaq (2394.36) was down 1.26%. The Dow may consolidate in the region of 10500-11000 in the coming days.
The Asians are down today. The Nikkei (10449.82) is down 1.61%, the Shanghai (2690.03) is down 0.76% and the Hang Seng (20242.58) is down 0.88%. While above 2650, the Shanghai may move up towards 2800 in the coming days. In India, the Sensex (17265.87) and the Nifty (5178.90) were up about 0.41% yesterday. The Sensex may move in the range of 16750-17600 in the coming days.
In Australia, the All Ordinaries (4635.60) is down 0.94% today.
Crude (73.97) continued its downmove breaking below the Support at 75-74.50 region as expected. The higher inventory levels and the Euro zone debt concerns are retaining the downside pressure. As mentioned earlier we might expect further downmove towards 72-70 in the coming days.
Gold (1237.50) is continuing to keep up its upside momentum for a further rise towards 1250-70. We might expect some profit taking at this 1250-70 region. To see the Gold graph click on the following link:
The Gold/Crude ratio has risen sharply since last week and there is some Resistance near current levels. Gold-Euro also has a Resistance at current levels at 986.17. Will we see some pull back in Gold? We will have to wait and watch. But since Crude is looking weak we see less chances of the Resistance in the Gold/Crude ration holding which suggests that Gold might be ranged for some time instead of seeing a sharp pull back.To see the Gold/Crude ratio graph click on the following link:
The Euro (1.2530) is looking quite ugly...it seems no one wants to be seen with one. It has weakened against all currencies. There does not seem to be any support in sight, with the market clearly defying the EU's might. A test of the Oct-08 low of 1.2331 is possible. Are we going to see some vintage co-ordinated intervention by central banks around the world? Problem with that strategy is, it tends to fail, at least in the short term. NOTE HOWEVER that there is an important Resistance on Gold-Euro at current levels of 986.17. SOME PULLBACK MIGHT BE POSSIBLE??
The Pound (1.4610) is not looking much better, having been clobbered yesterday. Some support might be seen at 1.4474, last week's low. Dollar-Yen (92.78) has come off from yesterday's high near 93.64, reflecting the continued "risk aversion" in the market. In fact, Dollar-Yen could become even more bearish. Bad for most markets.
Dollar-Swiss (1.1175) has continued to move up through yesterday and might gun for last week's high near 1.1246. The Aussie (0.8957) is just about holding on in the current evironmentm, but does not look bullish at all. Looks vulnerable to a fall.
In Asia, the Won (1131.80) and Sing Dollar (1.3819) have weakened again. Dollar-Rupee could rise a bit further today, after closing near 45.07 yesterday. A Week Close above 45.15 will be quite bullish.
The 3M USD LIBOR was increased further by 1 bps to be set at 0.44%. The 2Y and 10Y yeilds were down 3 bps and 4 bps each to quote at 0.83% and 3.53% respectively.
12:30 GMT US Apr Retail Sales
...Expected 0.3%...Previous 1.9%
13:15 GMT US Apr Industrial Production
...Expected 0.6%...Previous 0.1%
13:15 GMT US Apr Capacity Utilization
...Expected 73.8%...Previous 73.2%
Apr Australia Labour Force
....Actual 33.7K...Previous 27.7K
UK Apr Trade Balance
...Actual $ -7.5 Bln...Previous $ -6.3 Bln
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