Europe Roundup: Pound Gains as Traders Watch for BoE Signals Ahead, European Equities Gains, Gold Falls, Oil Prices Fall, Gain on Shortage Concerns supply – July 4, 2022

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Market overview

• German imports in May (monthly) 2.7%, forecast 0.9%, previous 3.1%

• German May trade balance -1.0 billion, forecast 2.7 billion, previous 3.5 billion

• May German exports (monthly) -0.5%, 0.9% forecast, 4.4% previous

• Swiss June CPI (monthly) 0.5%, forecast 0.3%, previous 0.7%

• EU May PPI (YoY) 36.3%, 36.7% forecast, 37.2% previous

• EU Investor Confidence in July Sentix -26.4, -19.9 forecast, -15.8 previous

Forward-looking economic data (GMT)

•13:00 Auction BTF 12 months French 0.609% previous

•1:00 p.m. French 3-month BTF auction -0.392% previous

•1:00 p.m. French 6-month BTF auction -0.163% previous

•13:30 Canada June Manufacturing PMI 56.8 previous

Future Outlook – Events, Other Releases (GMT)

• 2:30 PM Elderson of EU ECB speaks

• 2:30 p.m. Bank of Canada Business Outlook Survey

•3:00 p.m. German Vice-President Buba, Buch, speaks

•15:00 Buba Mauderer German speaking

•3:00 p.m. De Guindos of the ECB speaks

fxbeat

EUR/USD: The euro was little changed on Monday against the dollar as investors sought safety in the greenback amid concerns over slowing global growth. The war in Ukraine and its economic fallout, including soaring food and fuel inflation, have weighed heavily on the euro, which has depreciated more than 8% against the dollar this year. The difference between the response of the European Central Bank and the Federal Reserve to rising inflation also had an impact on the euro. Fears of a global recession kept the dollar high, although markets scaled back expectations of a US interest rate hike. Immediate resistance can be seen at 1.0463 (5DMA), a break up can trigger a rise towards 1.0537 (38.2% fib). On the downside, immediate support is seen at 1.0375 (23.6% fib), a break below could take the pair towards 1.0308. (lower BB).

GBP/USD: The pound strengthened against the dollar on Monday as investors await more signals from the Bank of England on its future rate hike path this week. Last week, the British pound concluded its biggest decline since 2016, down more than 10% against the dollar since the start of the year. The focus remains on the slowing UK economy, with the BoE tasked with tackling rising inflation and averting a recession. The BoE has raised rates five times since December and its next scheduled rate announcement will be in August. Some market participants are expecting another 50 basis point hike at the next meeting. Immediate resistance can be seen at 1.2170 (5DMA), a break up can trigger a rise towards 1.2279 (38.2% fib). On the downside, immediate support is seen at 1.2032 (23.6% fib), a break below could take the pair towards 1.1931 (BB ​​lower).

USD/CHF: The dollar fell against the Swiss franc on Monday as investors sought safety on concerns about slowing global growth. The search for safety kept the US dollar near 20-year highs, although early action was light with US markets on vacation. Investors were waiting for non-farm payrolls data for further clues. Friday’s payrolls report is expected to show job growth slowing to 270,000 in June, with average earnings slowing slightly to 5.0%. At 12:30 GMT, the dollar was up 0.16% against the Swiss franc at 0.9607. Immediate resistance can be seen at 0.9624 (50% fib), a break up can trigger a rise towards 0.9717 (38.2% fib). On the downside, immediate support is seen at 0.9578 (5DMA), a break below could take the pair towards 0.9531 (61.8% Fib).

USD/JPY: The dollar fell against the Japanese yen on Monday as investors sought safety in the dollar amid concerns over slowing global growth. . Investors are also awaiting the release of minutes from last month’s Fed meeting on Wednesday and US jobs data on Friday. The US Federal Reserve is expected to hike another 75 basis points (bps) this month. Friday’s payrolls report is expected to show employment growth slowing to 270,000 in June, with profits slowing an average of 5.0%. A strong resistance can be seen at 135.73 (5DMA), a break up can trigger a rise towards 136.56 (23.6%fib). On the downside, immediate support is seen at 134.20 (38.2% fib), a break below could take the pair towards 132.95 (50% fib).

Summary of actions

European stocks rose on oil and gas company profits on Monday as investors awaited eurozone inflation data after last week’s consumer price report cemented the case for a rate hike by the European Central Bank (ECB).

At (12:30 GMT), Britain’s benchmark FTSE 100 last traded at 1.20%, Germany’s Dax was up 0.22%, France’s CAC was last up 0.76 %.

Summary of raw materials

Gold fell on Monday as the outlook for higher interest rates dampened the appeal of the non-performing asset.

Spot gold fell 0.2% to $1,806.58 an ounce at 11:21 GMT after hitting a five-month low of $1,783.50 on Friday. US gold futures rose 0.3% to $1,806.50.

Oil prices reversed losses and rose on Monday as concerns over limited supply amid lower OPEC production, unrest in Libya and sanctions on Russia outweighed fears of a global recession.

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