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Market Morning Briefing

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Market Morning Briefing

Fri, Nov 6 2009, 03:26 GMT
by Kshitij Consultancy Service Team

Kshitij Consultancy Service

Morning Briefing : 06-Nov-2009 - 0330 GMT

GOOD MORNING!

EQUITIES
The US equities surged yesterday after better jobless claims numbers made investors optimistic a day ahead of the US Non Farm Payrolls data release. The Dow closed above 10000 surging over 2% and Nasdaq surged nearly 2.5% led by better forecats by Cisco. Technically, the Dow has found some solid Support at 9650 this week and this Support shall have to continue holding, if the rally is to continue.

The Asian indices are rejoicing on global economic optimism. The Nikkei (9827.88) is trading higher by 1.15% after closing 1.3% lower yesterday. The Hang Seng is up over 2% and the Shanghai by early half a percent. Shanghai (3172.32) has broken above the bullish channel on the daily and can rise further up on a break of 3300. The Sensex (16063.90) had risen yesterday amid a volatile trading day. It closed nearly 1% higher after falling over 2% intra-day.

COMMODITIES
Crude (79.97) has fallen and is now trading just below 80. Support is seen in the region 79.00-78.50 which we expect to hold as the broader picture continue to remain bullish. The US monthly jobs report is due today.

Gold (1090.60) is continuing to trade higher. With immediate Support at 1085, we expect a break above the Resistance region 1100-1110 in the coming days and see a rise towards 1150-1200. However, a break below 1085 might pull it down towards the significant Support region 1070-1060.

CURRENCIES
Most currencies (non-USD and non-JPY) have recovered and stabilised this week, possibly preparing for further strength next week. The Euro (1.4866) is likely to trade between 1.4800-4950 through today. The Aussie (0.9122) has moved from 0.8906 earlier in the week. It may trade quiet between 0.9050-9190 today. Dollar-Swiss (1.0170) has Support coming up in the 1.0130-0090 region now, which might hold for some days. Be careful there.

Dollar-Yen (90.60) is trading narrowly in the middle of a wide range of 89.50-91.50, with good chances of whipsawing within this range. Don't look for a trend just now. The Euro-Yen Cross (134.75) has potential to rise towards 136.50. The Pound (1.6590) has been bullish over the last couple of weeks, but now faces an important trend Resistance at 1.6640, which could induce a profit-taking dip towards 1.6450.

In Asia, the Sing Dollar (1.3945) continues to recover and may test 1.3900. The Korean Won (1171.20) is trading at its strongest in more than a week. Dollar-Rupee had closed at 47.02 yesterday. The 1-mth NDF quotes near 46.90. As such there are decent chances of a dip below 47.00 today.

INTEREST RATES
3M USD LIBOR was unchanged at 0.28%. The yields on US Treasuries fell marginally yesterday. The 2Y yield fell 2 bps to close at 0.88% while the 10Y yield was flat at 3.53%, thus making the yield curve steeper.

The BoE and the ECB have kept the interest rates unchanged and have signalled end to the stimulus. ECB's Trichet commented that the liquidity operations will be withdrawn and the BoE had slowed the pace of bond purchases. Withdrawl of stimulus would wipe out excess liquidity pumped in over the last 1 year by all the major central banks.

DATA TODAY
12:00 GMT Sep CA Labour Force
...Expected 10.3K...Previous 30.6K

01:30 GMT Oct US NFP
...Expected - 173K...Previous - 263K
http://www.kshitij.com/fundamentals/funcharts/usnfp.shtml

DATA YESTERDAY
Oct Australia Trade Balance
...Actual A$ -1.85 Bln...Previous A$ -1.65 Bln
http://www.kshitij.com/fundamentals/funcharts/autrbal.shtml

EU Retail Sales
...Actual -0.7%...Previous -0.1%
http://www.kshitij.com/fundamentals/funcharts/euretail.shtml

BOE Mtg
...Actual 0.50%...Previous 0.50%
http://www.kshitij.com/fundamentals/funcharts/ukboe.shtml

E-15 ECB Announcement
...Actual 1.00%...Previous 1.00%
http://www.kshitij.com/fundamentals/funcharts/euecb.shtml

Published on  Fri, Nov 6 2009, 03:37 GMT