Monday November 15, 2010 - 03:46:09 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 15-Nov-2010 -0344 GMT
US stocks closed in the red on Friday, with Dow shaving off 0.8% to close at 11,193 and S&P500 down 1.18% to close at 1,199. Dow having closed below its short term trend supports is vulnerable to a sell-off towards in next zone of support between 10,900-11,000. Bias remains bearish as long as Dow is not closing above 11,300.
Stepping into trade this morning, Asian equity markets are a mixed bag with Hangseng and Shanghai off by a 0.12-0.29% and Nikkei in the green by 0.71% (9,794) and ASX Australia up 0.36%. Better than expected GDP numbers for the July-September quarter from Japan is also helping the sentiment in Tokyo. Nikkei looks constructive as long as 9600 holds and can target 10,200. On friday Nifty closed with a 2% cut at 6071.65, lead by heavy losses in Banking, realty and metal counters. With Nifty now trading below key support zone between 6140-50 is vulnearble to further erosion towards 6000 in the near term. Resistance is expected around 6080-6100 and then 6140-50.. Only a move above 6200 will flip the bias to bullish.
Crude (85.35) fell sharply on Firday. Fears that China might increase interest rates, concerns on the Euro zone economy and the stronger dollar pulled down the price. However, the Support in 85.00-84.50 which we had mentioned earlier is holding very well and is retaining our overall bullish view for a rise towards 90-93 in the coming weeks.
Gold (1372.50) price tanked on Friday breaking below its Support at 1380 following the rumors that China might increase the interest rates. While below 1380, there are chances of further dip towards 1350-30. However, the broader outlook is still bullish.
The Euro (1.3711) is looking weak although it has risen from Friday's low of 1.3573. While below the Resistance in 1.3800-20 region there are good chances of further fall towards 1.3530-00 this week.
The Pound (1.6136) is looking bullish for a rise towards 1.6300 with strong Support in the broad 1.6000-5950 region.
Dollar Yen is trading at 82.57 and trend remains bullish as long as 81.60 holds, resistance is expected around 83. Eur-Yen is trading at 113.25 and is ranged between 112.60-113.70.
Dollar-Swiss has opened a little lower today and may see some upmove towards 0.99 figure later today. While above 0.9860, Aussie may see some upmove towards 0.9950-70 in the coming sessions, else a dip towards 0.9750 can be seen.
The Asian currencies are trading weak. The Korean-Won is trading near 1128 and the USD-SGD is trading near 1.2992. Dollar-Rupee has closed higher at 44.80/81 on Friday and has good chances of further rise towards 45.00-20 this week while above 44.60.
The 3M USD LIBOR was unchanged at 0.29%. The 2Y yields and 10Y yields were up 5 bps and 15 bps to quote at 0.50% and 2.79% respectively.
The yields on te US Treasuries continued their upmove today, touching a 2-month high ahead of an anticipated increase in retail sales numbers and Fed's planned purchases.
China today said that its four biggest state banks had met their allocated loan targets for the year and will not be allowed to issue any new loans to property developers for the rest of the year.
JP GDP QoQ (1st Pre)
...Actual 0.9%...Previous 0.4%
09:00 GMT EU Trade Bal
...Expected 1.3 Bln...Actual -1.4 Bln
13:30 GMT US Oct Retail Sales
...Expected 0.7%...Previous 0.6
UK Cons Conf
...ACtual 52...Previous 53
EU Oct IND Prodn (MoM)
...ACtual -0.9%...Previous 1.1%
EU GDP Q2 '10 Final
...ACtual 0.4%...Previous 1.0%
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