Monday October 18, 2010 - 03:44:31 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 18-Oct-2010 -0341 GMT
The US Equities were up last week. The Dow (11062.78) was up about 0.5% and the S&P 500 (1176.19) was up around 1%. The Dow was moving in the range of 11000-100 last week and we may see it move up towards 11250 in the coming weeks.
The Asians are mixed today. The Nikkei (9547.66, up 0.5%) and Shanghai (3003.14, up 1.08%) are trading higher today. The Shanghai is trading just above 3000 and has some Resistance at current levels. In India, Sensex (20090.18, down 0.28%) and Nifty (6062.65, down 0.67%) fell last week. The Coal India IPO is starting today which may take the markets higher in the coming days. We may see the Sensex move towards 22000-500 before it goes in to a strong downmove in the coming weeks/months.
Crude (80.78) fell sharply on Friday following the stronger dollar. Support is seen in 80.00-79.50 region which if holds might see a bounce back once again towards 83-85 in the coming days. However, a break below 79.50 might increase the chances of further dip towards 77-75.
Gold (1359.40) witnessed a sharp fall on Friday. Profit taking and stronger dollar triggered the fall. A break below 1350 might see further dip towards 1330-20 in the coming days. However, the broader outlook is bullish and a break below 1320 is not looking likely as of now.
Further pickup in the Dollar across the board in Asia today, as Friday's short-covering continues. The Dollar Index (77.38) has risen further from Friday's close at 77.996, after having seen a low of 76.14 on Friday.
The Euro (1.3882) trades lower, compared to Friday's high near 1.4159. Dollar-Yen (81.37) is trading more or less sideways, but up from Friday's low of 80.87. Dollar-Swiss (0.9611) is up from last week's low of 0.9462. The Pound (1.5930) is down from Friday's high of 1.6107. The Aussie ( 0.9847) has come off after just about kissing Parity at 1.0002/4 on Friday. There are decent chances of further sizeable correction in the Dollar.
There is recovery in the Dollar against Emerging currencies as well. It is trading higher at 1.3030 against the SGD, compared to a low of 1.2890 last Thursday. Dollar-Won (1117.90-1118.60) is also trading higher. The Yuan (6.6310) however continues to strengthen, trading near 6.6310-6.6502. The Brazilian Real is being quoted at 1.6534-6655.
The Indian Rupee, which had closed at 44.10 on Friday, is quite likely to weaken today. Expect a rise in USDINR towards 44.35-45.
The 3M USD LIBOR was unchanged at 0.29%. The 2Y yield was down 2 bps at 0.35% while the 10Y yield was up 7 bps to quote at 2.48%.
13:00 GMT US Aug TICS (Net foreign purch of long-term Sec)
...Previous $ 61.2 Bln
13:15 GMT US Sep Industrial Production
13:15 GMT US Sep Capacity Utilization
EU Sep CPI (YoY)
...Actual 1.0%...Previous 1.0%
EU Trade Bal
...Actual -1.4 Bln...Previous -0.2 Bln
US Sep Retail Sales
...Actual 0.4%...Previous 1.0%
US Sep Core CPI (MoM)
...Actual 0.0%...Previous 0.0%
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