Tuesday August 31, 2010 - 05:08:12 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 31-Aug-2010 - 0504 GMT
The US Equities fell on account of less than expected increase in the US Personal Income yesterday coupled with concerns over the outcome of US Jobs data due later this week. The Dow (10009.73) was down 1.39% and the S&P 500 (1048.92) was down 1.47%. The Dow has closed just above the important Support at 10000 and it needs to be seen whether this Support (at 10000) is honoured (preferred) or broken in the coming sessions.
The Asian are all in Red. Fading hopes of Japanese intervention (on stronger Yen) and weak US equities have pulled down Asia today. The Nikkei (8912.33, down 2.59%) may fall towards 8500 on a weekly close below 9000 and the Shanghai (2634.91) is down 0.67%. In India, the Sensex (18302.11, up 0.19%) and the Nifty (5415.45, up 0.12%) lost early gains to close marginally higher. The Sensex may fall towards 17500 in the coming days.
Crude (74.19) fell from the high of 75.58 and is now trading just above 74. The price movement is continuing to follow the equtiy markets which fell more than 1% yesterday. The stronger dollar also added to the downside pressure. With Resistance at 76, Crude is expected to remain pressured on the downside for some time.
Gold (1238) is continuing to trade in the 1230-45 range over the last few days. 1250 is an important Resistance to watch for and 1220-00 is a significant Support region seen on the downside. We might expect the sideways movement to contiue till the US NFP data release which is due this Friday (03-Sep-10).
The Dollar and Yen are trading strong. The Euro (1.2657) has come off from yesterday's high of 1.2755 and might test its crucial Support at 1.2600 today. A break below 1.2600 might see further dip towards 1.2500-450. Dollar-Yen (84.40) failed to sustain on the upside yesterday as market belived that BOJ's move is not strong enough to weaken the Yen. The broader downtrend is still intact. Euro-Yen Cross (106.81) is keeping up the bearish sentiment intact and might dip towards 105-103 in the coming days.
Dollar-Swiss was unable to rise past 1.0300 and may come down towards 1.0200 followed by some recovery today. Aussie has honoured the Support at 0.8900 and may move up towards 0.9000. Cable has been unable to break below 1.5450 and may see some upmove towards 1.5500-50 in the coming sessions today.
The Asian currencies are trading weak as compared to yesterday given the overall strength of the dollar seen all over. The Korean-Won is trading near 1194 and USD-SGD is trading near 1.3557. Dollar-Rupee closed higher at 46.91/92 yesterday and is keeping up the bullish sentiment intact for a rise towards 47.10-20.
The 3M USD LIBOR was unchanged at 0.30%. The 2Y yields were down 4 bps at 0.49% and 10Y yields were down 11 bps at 2.53%.
05:25 GMT IN GDP
...Expected 8.8%...Previous 8.6%
09:00 GMT EU Unemp
...Expected 10.0%...Previous 10.0%
12:30 GMT CA GDP
...Expected 0.2%...Previous 0.1%
13:00 GMT US Case Schiller
...Expected 3.7%...Previous 4.6%
14:00 GMT US Cons Conf
...Expected 50.9...Previous 50.4
EU Biz Climate
...Actual 101.8...Previous 101.3
US Aug Personal Income
...Actual 0.2%...Previous 0.0%
US Aug PCE Price Index M/M
...Actual 0.4%...Previous 0.0%
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