Tuesday June 1, 2010 - 03:39:48 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 01-Jun-2010 - 0330 GMT
The overall feeling in the morning today is that there is no "We'll all live for ever, so let's party and buy" kind of bullishness in the markets.
Asian stocks are trading lower today, after having moved up yesterday. Political trouble in Japan (Hatoyama is under pressure to resign) and a report suggesting slower manufacturing growth in China are cited as reasons for the dip in Equities today. Europe was a mixed bag yesterday. The Nikkei (9686) is down 0.84%, Shanghai (2571) is down a similar 0.8% and the All Ordinaries (4421) is down 0.72%. Both the Nikkei and the Shanghai are looking ranged or bearish.
The US was closed for Memorial Day yesterday. Indian stocks could also falter a bit today, following Asian cues. The Sensex and Nifty had closed at 16944.63 and 5086.30 respectively.
Crude (74.23) is continuing to trade higher. As mentioned earlier, 76 is a very significant Resistance level and a strong break above it might trigger fresh rally towards 80-85 in the coming days. While, 76 holds we might see a pull back towards 72-70. To see the Resistance on the Crude graph click on the following link:
Gold (1220.20) is continuing to trade strong and is keeping up the overall bullish sentiment intact. While above 1200 there are good chances a rise once again towards 1250 in the coming days. On the downside 1180-60 is a significant Support seen below 1200.
The Euro (1.2260) has come off from yesterday's modest high near 1.2334. It continues to look bearish, and may dip towards 1.22 and lower this week. Dollar-Yen (91.10) has also refused to sustain above 91.50 yesterday. Resistance seen at 91.50-92.00 now. The weakness isn the Nikkei is also dampening Dollar-Yen. The Euro-Yen Cross (111.75) has fallen a good bit as a result, coming down from yesterday's high near 112.93 and Friday's high near 113.69.
The Pound (1.4488) trades relatively quiet. Remember that the UK was also closed yesterday for the May Bank Holiday. Dollar-Swiss (1.1554) too has been moving sideways since yesterday. A bit of a rally towards 1.1615 might be possible today. The Aussie (0.8396) has fallen back today, from yesterday's high near 0.8515 and Friday's high near 0.8551.
The Asian currencies are also trading slightly weaker today. Dollar-Won (1206.80) is up, from yesterday's low of 1194.10 and Friday's low of 1191.00. Similarly, USD-SGD is trading slightly higher in 1.4020, compared to yesterday's low near 1.3972. The trend is positive overall for the US Dollar, with good Support at 1.3920.
Dollar-Rupee had closed near 46.36 yesterday and might move up a bit today, if it follows Asian cues.
The 3M USD LIBOR was unchaged at 0.54%. The 2Y and 10Y yields are at 0.77% and 3.29%.
The Federal Reserve bank of Chicago President Charles Evans has stated that the Euro zone's debt crisis would delay the rate hikes in the US.
The RBA and BOC meetings are scheduled for today. While the RBA is expected to leave the rates unchanged at 4.50%, the BOC is expected to increase the rates by 25 bps to 0.50%
04:30 GMT AUD RBA Interest Rate
...Expected 4.50%...Previous 4.50%
06:45 GMT CH GDP QoQ (1st Quarter'10)
...Expected 0.7%...Previous 0.7%
09:00 GMT EU Unemp
...Expected 10.1%...Previous 10.0%
13:00 GMT BoC Meeting
...Expected 0.50%...Previous 0.25%
14:00 GMT May US Manufacturing ISM
...Expected 59.6...Previous 60.4
Actual 8.6% ...Previous 6.0%
EU Biz Climate
Actual 98.4...Previous 99.6
Actual 0.6%...Previous 0.3%
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