Thursday July 8, 2010 - 03:44:45 GMT
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Morning Briefing : 08-Jul-2010 - 0342 GMT
The US Markets surged yesterday over growth in US Retail Sales. The Dow (10018.28) closed up 2.82% and the S&P 500 (1060.27) closed up 3.13%. The Dow may move up towards 10200-50 this week.
The Asian Equities are all in the Green today except China. The markets are up today over the increased optimism fuelled by the US Retail Sale figures. We still see the chances of a fall towards 9000 on the Nikkei (9527.21, up 2.67%) and 2250 on the Shanghai (2419.59, flat) in the coming weeks. In India, the Sensex (17471.03) was down 0.81% and the Nifty (5241.10) was down 0.91% yesterday. The Sensex has been moving in the region of 17750-450 for the past few days and we need to wait and watch on which side of the range does it break in the coming weeks.
Crude (74.66) has risen sharply from yesterday's low of 71.44 and is now trading higher above 74. The strong equtiy markets, weaker dollar and the expectations for a fall in US Crude inventory, the data for which is due today supported the price rise. While above 74, there are good chances of further rise towards 75.50-76.00.
Gold (1202.60) has bounced back from yesterday's low of 1185. As mentioned earlier 1220-30 is the Support-turned-Resistance level to watch for which if holds might retain the current downside pressure and keep up the chances of a dip to 1175-70. However, the broader picture is bullish.
Further weakness in the US Dollar overnight on "risk appetite" coming back a bit. But the move may be near its end. The US Dollar Index (83.96) has been falling continuously for 5 days, but now has Support at 83.42, from where it could bounce back. The Euro (1.2665) has seen a high near 1.2688 today and has Resistance at 1.2720 now, where it can run into profit-taking. Dollar-Yen (88.37) has seen a strong bounce since yesterday's low of 87.02. Further gains towards 89.35 possible. The Euro-Yen Cross (111.92) has also moved up well today, but could stabilise now, if the Euro sees profit-taking and Dollar-Yen rises.
Dollar-Swiss (1.05) broke strongly below the 200-day MA (1.0620) yesterday. Some Support might come in between now and 1.0435. The Pound (1.5198) has been in an upmove for a long time but is running into Resistance near 1.52 now. The Aussie (0.8730) has seen a sharp rise over the last three days, on rising commodity prices and hopes of an interest rate increase in the future and on good Employment data today. It can rise further to test crucial Resistance at 0.8860.
In Asia, the Korean Won (1214.50) has gained back a bit today, from yesterday's high near 1227.80. It might consolidate sideways between 1205-1225 for a few days. USD-SGD (1.3824) too has given up a lot of its gains, coming from a high near 1.3981 seen on Tuesday and a high near 1.4071 seen Wednesday last week. Further dip towards 1.3775 is possible. Dollar-Rupee ran into light profit-taking at 47.15 yesterday and closed near 47.02. It may dip a bit more towards 46.80 over today-tomorrow as more profit-taking comes in.
The 3M USD LIBOR was unchanged at 0.53%. The 2Y and 10Y yields were 1 bps and 5 bps each to quote at 0.62% and 2.99% respectively.
The BOE and ECB meet on interest rate decision is scheduled for today and they are expected to leave the interest rates unchanged at 050% and 1.00% respectively.
June Australia Labour Force
...Actual 45.9K...Previous 22.8K
11:00 GMT BOE Mtg
...Expected 0.50%...Previous 0.50%
11:45 GMT E-15 ECB Announcement
...Expected 1.00%...Previous 1.00%
EU GDP Q1 '10 2nd Quarter
...Actual 0.2%...Previous 0.2%
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