Thursday August 12, 2010 - 03:44:58 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 12-Aug-2010 - 0342 GMT
The US Equities dived yesterday. The bad news from global central banks and a sudden surge of weak sentiments has led to this "corrective" fall which may not come to an immediate halt. The Dow (10378.83, down 2.49%) and the S&P (1089.47, down 2.82%) are below their significant Support levels at 10500 and 1100 respectively and a failure to move up beyond these levels today, may see them fall further towards 10000 and 1050 in the coming sessions this week.
The Asians are all in the Red following global recovery concerns. The Nikkei (9105.20) is down 2.02% and the Shanghai (2599.20) is down 0.32%. In India, the Sensex (18070.19) was down 0.82% and the Nifty (5420.60) was down 0.73% yesterday. The Sensex has an important Support near 17800-50 region.
Crude (77.37) fell sharply breaking below 80 and is now trading below 78. Though the EIA's data released showed an unexpected drop of 3 million barrels in the US Crude inventories, increase in the gasoline stocks, weaker equities market, strong dollar and the economic recovery concerns pulled down the price sharply. Support is seen at 76 which might be tested in the coming days. To see the Crude graph click on the following link:
Gold (1198.20) is continuing to be ranged between 1190-1210 and is still not gaining upside momentum to see a sharp upmove above 1200. The outlook is continuing to remain mixed.
The Dollar and the Yen and continuing to retain their strength. The Euro (1.2885) fell sharply breaking below 1.3000 yesterday and is now trading below 1.29. The 21-Week-MA is at 1.2839 and the 100-DMA is at 1.2805, a strong break below these would pull it further down towards 1.2750. Dollar-Yen (85.00) failed to sustain the bounce back seen in the US session yesterday and is keeping its overall bearish sentiment intact for a further fall towards 84.00-83.50 on a break below the Support at 84.80. The Euro-Yen Cross (109.50) is retaining its downside momentum and a break below 109 might see 108.00-107.50 on the downside.
Dollar-Swiss (1.0575) may come down towards 1.0450 today. Aussie (0.8941) may go down towards 0.8900 today and Cable (1.5669) may not be able to break below the Support at 1.5600 in the coming sessions today.
The Asian currencies are continuing to trade weak. The Korean-Won is trading near 1192 and has good chances of weakening further to 1200-1210 in the coming days. The USD-SGD has risen sharply above 1.3600 and is now trading near 1.3641. Dollar-Rupee has closed higher yesterday at 46.70/71 and has good chances of a rise to 47 given the overall strengthness in the dollar.
The 3M USD LIBOR was down 2 bps to be set at 0.38%. The 2Y yield was unchanged at 0.51% while the 10Y yield was down 5 bps to quote at 2.70%.
July Australia Labour Force
...Actual 23.5K...Previous 37.4K
09:00 GMT EU July IND Prodn (MoM)
...Expected 0.7%...Previous 1.0%
UK Cons Conf
...Actual 60...Previous 63
08:30 GMT UK Unemp
...Expected 7.8%...Previous 7.8%
12:30 GMT US July Trade Balance
...Expected $ -42.0 Bln...Previous $ -42.3 Bln
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