Morning Briefing : 20-Nov-2009 - 0336 GMT


GOOD MORNING!


EQUITIES
The Dow (10332.44) and the Nasdaq (2156.82) fell 0.90% and 1.66% respectively. The Dow seems to have found Resistance at 10500 as was expected. Markets would expect the technology stocks to dip further today as Dell announced after market hours that sales to big businesses remained sluggish. Its earnings numbers failed to meet analyst's forecasts.

Among the Asians, the Nikkei (9426.60) is trading near an important Support at 9400. It will be essential to see whether this Support holds. All the other Asian indices are trading nearly 1% lower today. The Sensex (16785.65) had tumbled nearly 1.3% yesterday and may be in for some more losses today as well on global cues. There's Support on Sensex near 16400 for today. If this Support holds this week, we may expect 17500 over the next couple of weeks thereafter.


COMMODITIES
Crude (78.34) has fallen yesterday breaking below 79 as the dollar strengthened and also the concerns about economic recovery and energy demand is keeping up the downside pressure. If the current downmove continues we might see further dip towards 77-76 in the coming days.

Gold (1142.10) fell sharply yesterday as the dollar strengthened. However it has risen from yesterday's low of 1130 and is now trading above 1140. As mentioned earlier we might see a rise towards the Resistance at 1175 in the coming days. On the downside Support is seen in the 1120-00 region.


CURRENCIES
Profit-taking/ consolidation continues in the non-Dollar/ non-Yen currencies. The Euro (1.4888) rose to 1.4938 overnight after an intra-day dip to 1.4842, but has slipped back again. It currently trades in a narrower range of 1.4855-4985. The Aussie (0.9155) has been seeing profit-booking all through this week and might dip a bit more before it meets trend support near 0.9085. The Pound (1.6624) has also been falling through the week and may be in danger of falling deeper towards 1.61 in the weeks ahead unless there is a recovery very soon. Watch Support at 1.6570 today.

Dollar-Yen (88.86) continues to be pressured on the downside. A break below 88.55-15 can cause major heartburn, targeting 85 in the longer term and could end up hurting most other currencies/ assets.The Euro-Yen Cross (132.38) is the "last hope" as it trades above the 200-day MA at 132.20. Whether this holds or breaks will set the trend for the next few weeks.

Closer home, USD-SGD (1.3898) has seen a good bounce yesterday, but faces an important Resistance at 1.3926. Whether it holds or breaks may decide between whether the overall USD downtrend will continue or reverse. Similar position is there in USD-KRW (1163.50) and USD-INR (46.6850) which have important Resistances overhead at 1169.17 and 46.71 respectively.


INTEREST RATES
3M USD LIBOR was unchanged at 0.27%. The Treasury yields dipped slightly on risk-aversion. The 2Y and 10Y yields are quoting 5 and 3 bps lower at 0.69% and 3.34% respectively.

The 3M T-Bills were trading at 0.005%. The 3M T-Bills yields had turned negative yesterday for the second time in history and for the first time since December last year. The TED Spreads (a measure of reluctance of banks to lend to each other) have started rising once again after Fed's announcement of near-zero interest rates for an extended period. They are at a 3-month high of 26 bps.


DATA TODAY
05:00 GMT BOJ Meeting
...Expected 0.10%...Previous 0.10%
http://www.kshitij.com/fundamentals/funcharts/jpboj.shtml


DATA YESTERDAY
Oct US Philifed Index
...Actual 16.7...Previous 11.5