Monday November 1, 2010 - 03:37:23 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 01-Nov-2010 -0345 GMT
On friday US market closed flat with Dow at 11,118 and S&P 500 at 1,183. We are in one the most eventful week of the year, there is US Fed, RBA meeting, BOE and ECB meet, RBI monetary policy, US mid-term elections and last but not the least the US job numbers. There is also a whole whost of data out from major economies on manufacturing. Market is expected to be quite volatile and Dow is safe as long as it is not closing below 11,000, below which minor trend turns down towards 10,700, resistance is expected around 11,200.
Asian indicies ex-Japan are mostly trading in the Green. A strong PMI data out of China has sent banking and resource stocks soaring from Australia to Shanghai, both markets are up over a percent. Hangseng is trading almost 2% up at 23,543. Nifty after getting close to our expected support at 5950 boucned sharply to close at 6017 (up 0.5%). We expects Nifty to test 6080-6100 today, a break of which should sned the index towards 6140-50. Support is around 6050 and 6000.
Crude (81.89) is retaining the 79.50-84.50 range and has closed below 82 on Friday. The month end profit taking and investor sentiment turing cautious ahead of the US mid term elections and the FOMC meet pulled down the price. As mentioned earlier while above 80, the outlook is bullish for a rise towards 88-90 on a strong break above 85.
Gold (1357.10) has bounced back above 1350 and is retaining its strength. The significant Support at 1320 has held very well and the broader outlook remains bullish for a rise towards 1380-1400 in the coming days.
Spike in the Dollar-Yen (80.66) chart today morning, the pair having bounced from an early low near 80.23 to a high of 81.43 on fear/ talk of intervention. But there doesn't seem to have been any as yet. Other currencies are relatively quiet, but the Dollar is in the defensive overall.
The only currency against which it is establishing some gains is the Swiss Franc (0.9840), with good Support seen at 0.9820 on USDCHF. The Euro (1.3987) is ranging sideways at the moment within an overall uptrend, which could see it target 1.43. The Pound (1.6053) is possibly a little more bullish than the Euro, with the Euro-GBP (0.8710) likely to fall further in the days ahead. The Aussie (0.9877) has recovered well through last week and may move up towards 0.9950 this week.
The Korean Won (1116.50) and the Sing Dolla (1.2903) have gained again today, after having weakened a bit last week. Dollar-Rupee, which had closed at 44.42 on Friday, may dip towards 44.35-30 today.
The 3M USD LIBOR was unchanged at 0.29%. The 2Y and 10Y yields were down 2 bps and 10 bps each to quote at 0.34% and 2.62% respectively.
12:30 GMT US Sep Personal Income
...Expected 0.3%...Previous 0.5%
12:30 GMT US Sep PCE Price Index M/M
...Expected 0.4%...Previous 0.4%
14:00 GMT Oct US Manufacturing ISM
...Expected 54.2...Previous 54.4
...Actual 5.0%...Previous 5.1%
...Actual 10.1%...Previous 10.0%
US GDP Q3 '10 (Adv)
...Actual 2.0%...Previous 1.7%
...Actual 0.3%...Previous -0.1%
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