Morning Briefing : 16-Mar-2010 - 0341 GMT


GOOD MORNING!


EQUITIES
The US Equities ended mixed yesterday. The Dow (10642.15) closed 0.16% higher while the Nasdaq (2362.21) closed 0.23% lower. The Dow has continuously honoured the Trendline Support on the daily charts and looks set to rise towards 11000-250 in the next few weeks.

To see the Trendline Support on the Dow candle chart click on the following link: http://www.kshitij.com/graphgallery/djiacandle.shtml#candle

The Asian Equities are trading higher today led by finance and consumer companies, amid speculation that the Bank of Japan will take more steps to ease deflation in the world’s second-largest economy. The Nikkei (10776.52) is up 0.23% and may rise towards 11000-250 if it continues to trade above 10500-50 region. The Shanghai (2980.182, up 0.11%) closed below the immediate Support on the daily charts yesterday and a weekly close below 2950-75 may drag it towards 2640 in the near future. The HangSeng (21142.01) is up 0.30%. The Sensex (17164.99) closed flat yesterday and may face some Resistance near 17200-300 in the coming sessions.

To see the Shanghai candle chart click on the following link:
http://www.kshitij.com/graphgallery/shanghaicandle.shtml#candle


COMMODITIES
Crude (79.69) fell sharply breaking below 80 yesterday. The stronger dollar and concerns about the monetary policy tightening in China pulled down the price. As mentioned earlier, while below 80 we might see 78-77.50 on the downside. Remember Crude has been ranged between 68-84 over the last few months.

Gold (1109.40) is continuing to retain the range 1100-50. Though holding on to the crucial Support at 1100 amid stronger dollar is keeping the broader bullish sentiment intact, a break and weekly close below 1100 might turn it little bearish. Lack of strength on the upside move over the last few days is retaining this concern.

CURRENCIES
Things are a little mixed for the Dollar today, but overall positive. The Euro (1.3680) is trading lower than yesterday's high near 1.3774, but higher than the US session low near 1.3640, within an overall downtrend that has more room on the downside. Dollar-Yen (90.25) is trading lower, but is mixed and ranged overall. The Euro-Yen Cross (123.45) is following the Euro lower and can well fall another 100-150 points.

The Pound (1.5060) has weakened again on concerns of a rating downgrade and might be vulnerable to another 100 point dip today. Dollar-Swiss (1.0610) is trading weak, with the Swiss Franc being a drag on both the Dollar as well as the Euro. The Euro-Swis Cross (1.4515) is also weak land continues to fall. The Aussie (0.9135) had dipped to 0.9095 overnight, but has bounced back from there and might be able to stage a fresh rally.

In Asia, Dollar-Won (1131.10) is trading a tad lower than yesterday's levels near 1134.10, but is more or less maintaining the tight range it has been in over the past few days. USD-SGD (1.3965) is a little lower today, after having bounced to 1.3981 yesterday. Dips are likely to be bought as the Support at 1.3940 is rather strong. Dollar-Rupee had closed at 45.5850 yesterday. The near term NDFs trade near 45.60. Watch what happens at the main Resistance at 45.65 today.

The markets might be quiet ahead of the FOMC meeting today. Rates are expected to be kept steady, but some direction as to future movements.


INTEREST RATES
3M USD LIBOR was unchanged at 0.26%. The yields on US Treasuries, too, were little changed ahead of the FOMC meeting scheduled today. The 2Y and 10Y yields were quoting near 0.93% and 3.69% respectively. There are concerns that the Fed might want to withdraw a trillion dollars worth of excess cash from the banking system. The yields on the US Treasuries are rising and so are the yield differentials between different maturities, thus making the yield curve steeper. Look at the 10Y-5Y yield differential chart at the following page: http://www.kshitij.com/graphgallery/usddiff.shtml#sindiff

DATA TODAY
09:00 GMT EU Feb CPI (YoY)
...Expected 0.9%...Previous 0.9%

12:30 GMT US Feb Housing Starts
...Expected 0.570 Mln...Previous 0.590 Mln
http://www.kshitij.com/fundamentals/funcharts/ushsgstarts.shtml

18:15 GMT US FOMC Interest Rate
...Expected <0.25%...Previous <0.25%
http://www.kshitij.com/fundamentals/funcharts/usfed.shtml

DATA YESTERDAY
--------------
US Feb TICS (Net foreign purch of long-term Sec)
...Actual $ 19.1 Bln...Previous $ 63.3 Bln
http://www.kshitij.com/fundamentals/funcharts/ustics.shtml

US Feb Industrial Production
...Actual 0.1%...Previous 0.9%

US Feb Capacity Utilization
...Actual 7.27%...Previous 72.6%