Wednesday September 15, 2010 - 03:51:48 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 15-Sep-2010 - 0350 GMT
The US Equities ended lower in a volatile session yesterday. The markets were concerned about lower German investor confidence - increasing worries about the Europe's economy. The Dow (10526.49) was down 0.17% and the S&P 500 (1121.10) was down 0.07%. The Dow has honoured the Resistance at 10550 yesterday, it needs to be seen if this Resistance holds or breaks in the coming days. A break above 10550 may take it towards 10700-50 in a couple of weeks.
The Asian Equities are mixed today. The Nikkei (9470.31, up 1.84%) rallied following Japanese intervention in Yen and the Shanghai (2677.81, down 0.40%) fell on concerns that the government may act to curb property prices again. The Nikkei may move towards 9700-50 on a break above 9450 over a couple of weeks while the Shanghai may continue to move in the range of 2600-700 for some more days. In India, the Sensex (19346.96, up 0.72%) and the Nifty (5795.55, up 0.62%) were up following investor enthusiasm and global strength in equities. The Sensex and Nifty are near Resistance levels and may not see much upside in the coming days.
Crude (76.32) has come off from yesterday's high of 77.99 following the news from Enbridge that it would resume operations soon. Technically, Crude has failed to see a strong break the Resistance at 78 which we had been mentioning for some time. However, there is Support in 75-74 region which will have to be watched for. To see the Crude graph click on the following link:
Gold (1268.40) has risen sharply breaking above its 1250-55 Resistance region following the weak economic data release from the Euro region. The broader bullish sentiment is intact. Resistance is seen in 1275-80 region and a strong break above it might trigger further upmove towards 1320-50 in the coming weeks. To see the Gold graph click on the following link:
Some recovery today morning in the Dollar after a severe beating yesterday. The Euro (1.2970) had risen to as much as 1.3033 on rumours that the Fed would come up with a plan to buy $1 trln in Bonds, ignoring the fall in the German ZEW Consumer Confidence Index to a 19-mth low. All said, 1.3050 is a strong Resistance now for the Euro. The FOMC meeting is due next week, Tuesday.
There has been intervention, finally, in Dollar-Yen, which has soared to 84.60, from an overnight low of 82.87, marginally below 83.00. The market's speculation that Kan will not intervene has been proven wrong. If the BOJ is resolute, 83.00 might become a bottom for Dollar-Yen.
Dollar-Swiss (1.0015) has also regained a decent bit today morning, after having fallen below the magic 1.00 figure to a low of 0.9932 yesterday. There is a lot of room on the upside now if the market manages to remain above 1.0000 and move up to 1.0100. The Pound (1.5480) moved up in the overall Dollar weakness yesterday, to as high as 1.5587, but has fallen back into its 1.55-53 range.
The Aussie (0.9359) has also fallen back today morning, despite the rise in Dollar-Yen, after having seen a high near 0.9457. Important Support seen at 0.9350 for today. Whether this holds or breaks will decide whether the Aussie will attempt an assault at 1.0000 or fall back instead.
In Asia, the Yuan has strengthened to 6.7360, its strongest level ever. USD-SGD (1.3380) has seen a bit of a bounce today, after having fallen to a low of 1.3310 yesterday. The Korean Won (1165.20) is also trading a little weaker, compared to yesterday's low of 1156.80. The 200-day MA is at 1164.60.
Dollar-Rupee might remain relatively weak, after having closed at 46.45 yesterday.
The 3M USD LIBOR was unchanged at 0.29%. The 2Y and 10Y yields were down 0 bps and 6 bps to quote at 0.50% and 2.68% respectively. The yields dropped following Japanese intervention in Yen and rumours that the Fed will Buy a Trillion Dollar worth of Treasuries.
08:30 GMT UK Unemp
...Expected 7.8%...Previous 7.8%
09:00 GMT EU July CPI (YoY)
...Expected 0.9%...Previous 1.0%
13:15 GMT US July Industrial Production
...Expected 0.4%...Previous 1.0%
13:15 GMT US July Capacity Utilization
...Expected 75.1%...Previous 74.8%
UK Cons Conf
...Actual 61...Previous 59 56
July UK CPI Y/Y
...Actual 3.1%...Previous 3.1%
EU July IND Prodn (MoM)
...Actual 0.0%...Previous -0.2%
US July Retail Sales
...Actual 0.4%...Previous 0.3%
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