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IDS World Markets Tues 27th October 09

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Ooh, an unusually bearish day. All Ords dropped -1.6% with some sectors getting a real walloping. REITS and Gold were the worst off, both -3.7% followed by Miners and Energy -2.6% and Materials -2.4%. Telecomms was the only green, +1.3%.


Asia knee-deep in red: China -1.9%, Honkers -1.5%, India -0.6% and Nikkers -1.5%.



On to UK/Europe:












CAC 40



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Australian Third-Quarter Business Confidence Jumps, NAB Says


Oct. 27 (Bloomberg) -- Australian business confidence surged in the third quarter, as companies reported an increase in trading, profits and forward orders.


An index of business sentiment rose to 16 points from minus 4 points in the second quarter, National Australia Bank Ltd. said, citing its quarterly survey of 930 companies conducted between the end of August and early September.


Australia’s economic growth will accelerate from 0.5 percent this year to 2 percent in 2010, National Australia said in a statement released today. The strengthening economy will also prompt central bank Governor Glenn Stevens, who raised borrowing costs this month, to further increase the benchmark interest rate in quarter percentage point steps to 4.25 percent by early March from 3.25 percent.

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China Reports Jump in Investment Abroad, Sees Production Surge


Oct. 27 (Bloomberg) -- China reported a 190 percent jump in overseas investment by its companies for the third quarter and predicted an acceleration in industrial production, underscoring the nation’s role in driving a global economic recovery.


Investment abroad rose to $20.5 billion in July through September, almost triple that of a year earlier, the Ministry of Commerce said in a statement today. Industrial output may rise 16 percent in the fourth quarter, Ministry of Industry and Information Technology official Zhu Hongren said in a briefing. Production in September was up 13.9 percent from a year before.

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India Begins Exit From Monetary Stimulus with Order to Buy Debt

Oct. 27 (Bloomberg) -- India’s central bank took the first step toward withdrawing its record monetary stimulus as inflation pressures build, ordering lenders to keep more cash in government bonds.


“It may be appropriate to sequence the ‘exit’ in a calibrated way,” Governor Duvvuri Subbarao said today after increasing the statutory liquidity ratio to 25 percent from 24 percent and raising the inflation forecast. The central bank kept benchmark policy rates unchanged, while maintaining its economic growth forecast of 6 percent “with an upward bias.”


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The Miami Music Festival, a showcase and conference featuring over 600 performances by emerging artists on 25 stages will take place on December 10-12, 2009 in the Brickell area of downtown Miami.

Interested artists should apply to perform simply by going to miamimusicfestival.org

You can also apply to attend the MMF conference for emerging artists at the Hyatt Regency Miami on December 11th and 12th.

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ING guys like all others, think its the same old play...


The consolidation continues, not a real surprise. But we consider this as a pull-back within the uptrend likely followed by this 8% to 10% short-term rally as we explained yesterday.

It is hard to say if we have already seen the lows within the current consolidation, although we believe we are very close. There is a possibility we see somewhat lower prices in the next few days in making this low within the consolidation, from where the rally starts. Please, read our comments in the ‘Trend Monitor’ about the SPX and AEX.


Our ratings are unchanged. SHORT-TERM ‘Long’, INTERMEDIATE-TERM ‘Short’ and LONGER-TERM ‘Short’. Aggressive short-term traders are buying on dips in this correction for the next expected 8% to 10% boost in prices. We will use this rally phase in increasing the Short position in our INTERMEDIATE-TERM rating.


Our KEY markets are still confirming our view of the next expected 8% to 10% short-term rise in equities.


BUND……Please, read our comments in the ‘Trend Monitor’ and we enclosed a chart. Still stuck within the trading range between 120 and 123. We see no clear relationship between equities and bonds at the moment.


VIX…..The chart is showing a jump in volatility, with prices testing the short-term resistance area between the horizontal line at 23.00 and the MA-50 line at 24.60. If prices are making a lower top at the MA-50 line we could see the development of a new declining short-term trend channel. Lower end of this channel is currently around 19.00.

A lower volatility is signaling a continuation of the uptrend in equities.


ITRAXX……Still moving below the MA-50 line at 88.85, pointing to a continuation of the downtrend towards the solid horizontal 65 support level. A close below 79 is confirming the bearish outlook. A declining ITRAXX should confirm the start of the next equity rally of around 8% to 10%.


EUR/USD…..Please, read our comments in the ‘Trend Monitor’ and we enclosed a chart. We still consider EUR/USD and Equity markets are moving in the same direction. With the likelihood of a higher Euro we would likely see higher equity markets on a short-term basis.


EUR/JPY……Pausing below horizontal resistance at 138.50. Downside potential is limited, with solid support coming in between the EMA-9 line at 136.15 and the horizontal line at 135.25. The chart is building momentum for a breakout above 138.50 for a rally towards the upper end of the trend channel around 144.75.



TRANSPORTS……..Weakness continues by the close below the MA-50 line at 3,833. Next horizontal support around 3,715, with crucial support at the EMA-200 line at 3,581. We still expect a resumption of the uptrend above horizontal resistance at 4,090 towards the strong horizontal resistance level in the weekly chart around the 4,175 level….

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