Intraday Market Thoughts

Archived IMT (2010.10.28)

by Ashraf Laidi
Oct 28, 2010 1:01

US 10-YEAR YIELDS have not only regained their 55-day MA of 2.57% but are less than a full point of reaching their 100-day MA (2.79%) for the first time since late April. Interestingly, yields could surpass both averages on the same week, in which case would be an added positive in the USD rebound. Whether this comes in the form of a market-positive Q3 GDP (Friday) or further scaling down in the expectations of the next weeks QE, the dynamics are here. With USDCHF proving highly correlated with yields, I see 1.0050 as an interim resistance, before 1.0170 stands as subsequent target for the week. FINALLY, RISING YIELDS COULD MEAN A LOWER YEN for now, but be careful about the offsetiing impact from falling equities post-election/FOMC. Short term plays favour USDJPY on any positive surprise/interpretation from Friday's Q3 GDP. A Thursday close above the Sep 21 trendline resistance of 81.80 would be instrumental in extending gains towards 83.20s. Also watch the yen impact of the BoJ's expected downgrade of its economic outlook (growth & price). I am away on business so most of my updates and insights will be on Twitter http://twitter.com/alaidi

 
 

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