Wednesday June 2, 2010 - 03:40:47 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 02-Jun-2010 - 0339 GMT
Negative mood persists with a negative closing on the Dow (10024.02, -112.61) which has closed just above 10000. This is after an early rally to an intra-day high of 10218.33. Fall towards 9500 possible. The structure of the charts is not encouraging. Take a look at
Asian shares are mixed today, ranging from -0.65% (China and Korea) to +0.60% (Singapore). The Nikkei (9748, +36) is slightly higher on news of Hatoyama's resignation. The good thing is that the index has come up from an opening low near 9605. Overall, the market appears set to trade a range of 9300-10300 for a few weeks. There is little room for hope for improverment in the political (and economic) landscape of Japan.
The Sensex and Nifty had closed at 16572.03 and 4970.20 respectively yesterday, coming off from important Resistances. Watch Supports at 16000 and 4900. For charts, please click on
Crude (72.75) failed to sustain above 75 and fell sharply from yesterday's high of 75.33 and is now trading below 73. The slow down in China's manufacturing activites has added further pressure to the global economic recovery. Though some Support is seen at 72, the stronger dollar and the Euro zone's debt concerns might continue to retain the downside pressure on the Crude price.
Gold (1222.60) is continuing to trade higher and is keeping up our bullish sentiment intact for a rise towards 1250 in the coming days. Support is seen at 1200.
The Euro (1.2253) recovered from yesterday's new low near 1.2110, rising to a high near 1.2354, but has fallen back below 1.23 again. The daily chart is beginning to look bad now, with Resitance near 1.2335. The European economy looks anaemic by itself, without the addes problems of debt. Dollar-Yen (91.53) has risen well today to a high near 91.78, the highest since the 20-May low of 88.95. Yen's weakness is being blamed on poitical instability in Japan.
The Pound (1.4706) had shot to 1.4590 yesterday on news that Prudential would back from the takeover of AIG's Asian operations. It has continued to rise today. Dollar-Swiss continues to trade mixed near 1.1555. The Aussie (0.8347) trades lower than last wee'ks high near 0.8551 and looks weak overall.
USD-KRW trades higher near 1216. USD-SGD too has moved up to 1.4113. Dollar-Rupee had closed at 47.16 yesterday and might move up a bit more today.
The 3M USD LIBOR was unchanged at 0.54%. The 2Y yield was up 2 bps to quote at 0.79% while the 10Y yields was down 1 bps to quote at 3.28%.
Yesterday, the BOC raised its interest rates by 25 bps to 0.50%, the first among the G-7 group to raise the interest rates. However, considering the global recovery concerns, it has signaled that there could be delay in increasing the rates further in their upcoming meetings.
RBA left the interest rates unchanged at 4.50% as expected and has pledged to leave the rates unchanged in the near term.
AU GDP QoQ (Mar'10)
...Actual 0.5%...Previous 1.1%
AUD RBA Interest Rate
...Actual 4.50%...Previous 4.50%
CH GDP QoQ (1st Quarter'10)
...Actual 0.4%...Previous 0.9%
...Actual 10.1%...Previous 10.0%
...Actual 0.50%...Previous 0.25%
May US Manufacturing ISM
...Actual 59.7...Previous 60.4
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