Market Morning Briefing
EQUITIES
The US equities lost heavily yesterday, following an unexpected surge in the US jobless claims. The Dow (10002.18) ended 2.61% lower and the Nasdaq (2145.43) ended 2.99% lower. The markets also reacted negatively to the concerns regarding rising debt levels in the European countries. At 2.61%, the Dow has seen its biggest percentage drop since July 2. The Dow has managed to close just above the crucial support level at 10000, which gives us some hope for the day.
All the Asian equities are in the red today. The Nikkei (10062.65) is down 2.83%, the Shanghai (2937.63) is down 1.93% and the HangSeng (19716.51) is down 3.07%. The Nikkei touched its 7-week low of 10049.88, following export concerns over stronger Yen. The Sensex (16224.95) closed 1.64% lower yesterday. Weak global cues and late sell-off in the markets erased the yesterday抯 gains. Markets are expected to be in the red today, following the markets globally.
COMMODITIES
Crude (72.99) fell sharply by 5% yesterday. Its steepest fall since Jul-09. Economic data release showing more than expected initial jobless claims and the strong dollar pulled down the price sharply. Immediate Support is seen at 72.50 a break below which might see 71 on the downside. To see the Crude graph click on the following link:
http://www.kshitij.com/graphgallery/nymexcrudecandle.shtml#candle
Gold (1065.30) price tanked yesterday following the bad economic data release showing more than initial jobless claims and the stronger dollar. A break below 1060 might see 1040-30 on the downside. The US NFP data release is due today will be watched closely following the jobless claims data released yesterday.
CURRENCIES
Very volatile session in the US and early Asia today, with the Dollar gaining sharply against most currencies other than the Yen. Some bounce back has been seen in Asia today. The Euro (1.3717) bore the brunt of it, falling to a low near 1.3670 in early Asia today. Dollar-Yen (89.70) fell to as low as 88.55 yesterday, but has bounced a bit from there. Continued bad news about Europe (Greece, Spain, Portugal) and a plunge in Toyota's stock (on the hybrid recalls) caused a fall in the Euro and a rise in the Yen. The Yen rose because it shares an inverse relationship with the Nikkei, which is currently near 10062.
The Aussie (0.8690) fell to a low near 0.8605 as Gold collapsed. The Pound (1.5745) has taken it hard, falling to a low near 1.5730 in the US session yesterday and again Asia today. Dollar-Swiss (1.0755) has risen very sharply, seeing a high near 1.08 today.
Most of the currencies are now at very crucial long-term Support/ Resistances. Maybe the market might pause to catch its breath for a few days now, after days of feverish action.
In Asia, the USD-SGD (1.4196) has risen strongly, to a high near 1.4225. Dollar-Won (1168) too has staged a strong rise after having dipped over the last three days, indicating strong chances of a trend reversal in favour of the Dollar. Dollar-Rupee NDFs had traded as high as 46.60 yesterday and possibly even 46.92. They are currently trading near 46.25 given the small recovery in Asia today. The onshore Spot had closed near 46.25 yesterday and there are decent chances of seeing 46.35-40 today.
INTEREST RATES
3M USD LIBOR was unchanged at 0.25%. The 2Y and 10Y yeilds fell 6 and 7 bps to 0.81% and 3.62% respectively.
Yesterday, the ECB and BoE kept the rates unchanged at 1% and 0.5% respectively.
Kshitij Consultancy Service
http://www.fxthoughts.com
Legal disclaimer and risk disclosure
These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsibly for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.
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