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Week ended 01/7/2011 -- Market this week .

Last month rating agency Moody’s warned that they may lower Spain’s debt rating because of country’s risk of injecting cash in banks. But it seems to be matter of past because now a counter steps come from  China. China  said it will continue buying Spanish Govt. debt.  Spain  is also planning to sign number of deals with china  in banking, tele-communication, energy  e.t.c. one such example is deal signed on Wednesday worth  $7.5 billion.
In this matter it is necessary to mention that china in past has announced deals with  countries like Greece and Portugal.
On the other side China is diversifying their foreign exchange reserve by purchasing South Korean bonds even in the situation when Korea imposing tax on interest income.  Looks like there is a  urgency for China.
Though last day’s Payroll data was not good but  some good reports came earlier  from US on car-sales, Employment news but one that is  very important is the improvement in commercial & industrial loan. Let  see the stock market ---


Index
Week Ended  1/7/2011
       (%)

Week Ended 12/31/2010 (%)





DOW
11674
0.83%

0.03%





FTSE
5984
1.44%

-1.81%





CAC
3865
1.60%

-2.46%





DAX
6947
0.47%

-2.02%





ATX
2897
-0.24%

0.69%





Belgium - BEL 20
2605
1.04%

-1.79%





DJ RUSSIA TITANS
6744
-0.10%

-0.07%





CANADA - S&P/TSX
13272
-1.27%

0.44%





ARGENTINA - Mer Val
3546
0.65%

1.35%





BOVESPA
70057
1.08%

1.19%





Australia - S&P/ASX
4705
-0.84%

-0.66%





New Zealand - NZX 50
3317
0.24%

-0.60%





NIKKEI
10541
3.06%

-0.49%





SHANGHAI COMP.
2838
1.06%

-0.95%





HANG SENG
23686
2.82%

0.88%





SENSEX
19691
-3.98%

2.17%





TAIEX
8782
-2.11%

1.25%





KOSPI
2086
1.70%

1.08%





STRAITS
3261
2.22%

1.49%





JKSE
3631
-1.94%

2.54%





THAILAND - SET
1036
0.38%

1.07%


Sensex , TAIEX, JKSE and conidian market saw little bit correction, as was expected. It is good that Chinese market is not making any fresh low.  Japanese market looking non-stop . Australian flood is one of the top news this week, mines are very much effected especially Coal mines. The customers who entered in long term contracts, they will face less difficulties for any price increase than others. Australia will feel the pressure  for any price increase because if the cost  increases than it’s competitors then there will be an disadvantage  and we cannot forget that it’s currency is already appreciating much against  U.S$.
Brazil has introduced new Reserve requirement for short position in U.S. $. This is to protect their currency from more appreciations against U.S$, it’s currency is facing appreciation from 2009. On the other side Brazil with Chile are focusing their look on Chinese currency appreciation for which they are facing difficulties in export.
Iran has invited delegation from different countries to inspect their atomic facilities, now this can calm the situation.
Philippines and Turkey became the first Emerging nations to sell international bond this year though many private and govt. organizations have the plan to do that.

Oil and gold corrected lot this week.

Commodity
Week Ended  1/7/2011
       (%)

Week Ended 12/31/2010 (%)





OIL  (Feb)
88.03
-3.66%

-0.14%





GOLD (Jan)
1368
-3.72%

2.97%



Everyone expecting oil to touch 100 in one run but thing was different. Oil broke it’s initial support, but I think this is a short-term correction for oil. But if it close below than 85-86 for some days then things could be little bit different.
This week Gold faced lot of down side, as it was expected. But important thing for Gold will be how it moves in coming days, whether it is still forming the  H&S pattern. We should remember that  in real market things can be different than what  we usually see or we know.
This week I am trying to give some new data.

Currency
Week Ended  1/7/2011
       (%)

Week Ended 12/31/2010 (%)





EURO
1.291
-3.51%

2.05%





YEN
83.15
2.52%

-2.15%





AUD
0.996
-2.63%

1.89%





RUPEE
45.37
1.24

-0.92%





REAL
1.684
-1.44%

-1.83%





MEXICAN PESO
12.228
-0.93%

-0.03%





SOUTH AFRICAN RAND
6.798
-2.68%

-1.75%





SWISS  FRANC
0.964
3.43%

-3.11%





NEW ZEALAND DOLLAR
0.76
-2.43%

4.28%


AUD could not sustaining the gains. YEN is depreciating much this week along with Swiss Franc & EURO. These  currencies  except  EURO made biggest appreciations in past. Good economic news from USA may help in US$ appreciation.


Treasury Yields
Week Ended  1/7/2011
       (%)

Week Ended 12/31/2010 (%)





5 Year Treasury Yields
1.964
-2.04%

-2.38%





10 Year Treasury Yields
3.322
0.91%

-2.77%





30 Year Treasury Yields
4.483
3.48%

-3.06%


Longer-term Treasury Yields are increasing this was good for stock market but in last two days they again reduce and as a result price of Treasury bond  have increased, payroll data disappoint many investors in last day.

Coming week
Dow jones may face a correction in coming days, it looks to me investor digest the good economic reports so in new year it made lower lows, same is true for FTSE. NIKKEI made lot of gains in this new year but as I told in past,  it is going in very much short to medium term  over-bought condition, so I must like to see the some corrections in  NIKKEI. As I told in my last weekly review in 25th December that we are going to see little more corrections in Shanghai composite, though it did it but in new year it was not making any new fresh move, probably Chinese market expecting some more news from  PBOC. During past few weeks I told many times that  T-SEC is very much over-bought so in new year it is showing that and if big  markets are not going to show any positive move in coming days then it may face more corrections. But these corrections  made it little bit cheap to buy for short-term . Some big corrections happened in  SENSEX too, now this corrections made the ground for foreign institutions  to carry their work in new year from where they left it for holiday season. 
In new year the market is again  speeding up and I think normal market will start from coming week.
This week’s increase in  long-term Treasury Yields may be indicating a good economic situation. We can say some good reports from USA  did it’s effect. In coming week  some reports such as unemployment claim, US trade deficit, CPI, retail sale and consumer sentiment  are due.
I am not much worried about the fall of oil, but we can get clear picture after some time in new year.


NOTE :  Please see the disclaimer below this blog.



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