Thursday June 3, 2010 - 03:41:17 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 03-Jun-2010 - 0333 GMT
Strong rise in the Dow yesterday to 10249.54 (+225.52, 2.25%). This has led to joy in Asia today, where all indices are in the green, ranging between 0.2% and 2.0%. A dampener is China, which is up only 0.18%.
Stocks in USA rose on strong car sales and pending home sales. The all important Non-Farm Payroll data is due tomorrow. Yesterday's rise in the Dow has changed the picture substantially. Repeated attempts to break below 10000 have failed. Chances of a rally look good now. Take a look at
Indian stocks are likely to rise further today, bolstered by the good news.
Crude (73.53) has bounced back and is trading above 73 now. The Support at 72 mentioned earlier is holding. Better than expected US Pending Home Sales data that drove the US equity markets more that 2%, supported the price rise yesterday. As mentioned earlier, 76 is a very crucial Resistance to watch for and a strong break above it might trigger fresh rally towards 80. To see the Resistance on the Crude graph click on the following link:
Gold (1221.90), though continuing to trade above 1200, is not showing much strength to see a strong break above 1220. A pull back breaking below 1200 from current levels might increase the chances of testing 1170-50 on the downside. However, the broader picture remains bullish and we might see a bounce back once again from 1170-50 region. To see the Gold graph click on the following link:
Some repsite to the unabated Euro selling. The currency is trading near 1.2285, and has decent chances of rising towards 1.25 if it manages to break past 1.23. Our expectation of overall stabilisation between 1.21-25 seems to be working. Dollar-Yen (92.20) continues to rise and should be targeting 93 over today-tomorrow. Possibly higher next week.
The Pound (1.4685) was choppy between 1.4770-4553 yesterday, but looks bullish overall, targeting 1.48. Dollar-Swiss (1.1530) remains stable as of now, but may dip towards 1.14, mirroring the bullishness in the Euro and Pound. The Aussie (0.8459) has also recovered smartly from the low of 0.8275 yesterday. Further gains quite likely today.
The Asian currencies are also trading stronger today. Dollar-Won trades lower near 1205.80, from 1225 yesterday. USD-SGD trades lower near 1.4025, down from 1.4150-75 seen over the last two days. Dollar-Rupee is quite likely to fall towards 46.80 today, after closing at 46.9850 yesterday.
The 3M USD LIBOR was unchanged at 0.54%. The 2Y and 10Y yields were up 2 bps and 5 bps each to quote at 0.81% and 3.33% respectively. Though the yields have risen in the last one week, it is still within the strong downtrend seen since April. To see the USD Yields graph click on the following link:
May Australia Trade Balance
... Actual A$ 0.13 Bln...Previous A$ -2.04 Bln
09:00 GMT EU Retail Sales
... Expected 0.1%...Previous 0.0%
12:15 GMT US ADP Emp
... Expected 56K...Previous 32K
AU GDP QoQ (Mar'10)
...Actual 0.5%...Previous 1.1%
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