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Europe Roundup: Euro dips as dollar stands tall ,European stocks slips, Gold ticks up, Oil prices rise as tight supply counters China COVID, recession worries-June 14th,2022

Market Roundup

•UK May Claimant Count Change -19.7K  ,-49.4K forecast, -65.5K previous

•UK Apr Unemployment Rate  3.8% ,3.6% forecast, 3.7% previous

•UK Apr Average Earnings Index +Bonus  6.8% ,7.6% forecast, 7.0% previous

•German May CPI (YoY)  7.9%,7.9% forecast, 7.4% previous

•UK Apr Employment Change 3M/3M (MoM)  177K ,105K forecast,83K previous

•EU Apr Industrial Production (MoM) -2.0% forecast ,-1.8% previous

• German Jun ZEW Current Conditions  -28.0 ,-31.0 forecast , -36.5 previous

•EU Jun ZEW Economic Sentiment  -28.0 ,29.5 previous

• German Jun ZEW Economic Sentiment -27.6 , -27.5 forecast ,-34.3 previous

Looking Ahead Economic Data(GMT)

•12:30 Canada New Motor Vehicle Sales (MoM) 144.6% previous

•12:30 Canada Apr Manufacturing Sales (MoM)  1.6% forecast ,2.5% previous

•12:30 US May PPI (MoM ) 0.8% forecast , 0.5% previous

•12:30 US May PPI (YoY)  10.9% forecast ,11.0% previous

•12:30 US May Core PPI (MoM)  0.6% forecast , 0.4% previous

•12:55 US Redbook (YoY) 12.4% previous

•14:00 US  IBD/TIPP Economic Optimism 41.2 previous

Looking Ahead - Events, Other Releases (GMT)

•No significant events


EUR/USD: The euro continued its downward march against dollar on Tuesday as worries over aggressive U.S. interest rate hikes weighed in single currency. Focus is on the Fed's policy decision due on Wednesday, with many expecting a big three-quarter-percentage point rate hike following hot inflation print last week. Traders have also upped bets on how high interest rates might rise, seeing them peaking around 4% next year, versus the earlier 3% expectation. Immediate resistance can be seen at 1.0499(38.2%fib),an upside break can trigger rise towards 1.0587(50%fib).On the downside, immediate support is seen at 1.0395(23.6%fib), a break below could take the pair towards 1.0361(Lower BB).

GBP/USD: Sterling initially gained against dollar on Tuesday after UK job data but gave as stronger dollar weighed on pound . Data showed the jobless rate rose in the three months to April, bolstering prospects that the Bank of England will continue to raise interest rates. Britain’s jobless rate rose for the first time since late 2020, with official data showing it edged up to 3.8% in the three months to April from 3.7% for the three months to March. The employment data also showed there were signs of more people returning to the job market, where employers’ struggle to fill vacancies has added to the BoE’s inflation headache. Immediate resistance can be seen at 1.2108(Daily high),an upside break can trigger rise towards 1.2333(38.2%fib).On the downside, immediate support is seen at 1.2099(23.6%fib), a break below could take the pair towards 1.2000 (Psychological level).

 USD/CHF: The dollar dipped against the Swiss franc on Tuesday as investors awaited Federal Reserve due to start a two-day meeting later on Tuesday, markets waited to see if it raises rates by 75 bps, instead of the 50 bps originally anticipated. Global  markets have been rattled as investors price in aggressive central bank policy moves to quell inflation against a backdrop of the Ukraine crisis, concerned that this could lead to a global economic slowdown. At 10:50 GMT, the dollar was 0.34percent lower versus the Swiss franc at 0.9934 .Immediate resistance can be seen at 0.9982 (38.2%fib), an upside break can trigger rise towards 1.0026(Higher BB).On the downside, immediate support is seen at 0.9894 (50%fib), a break below could take the pair towards 0.9870(5DMA).

 USD/JPY: The dollar dipped against dollar on Tuesday as nerves about official intervention by Bank of Japan gave brief respite to the yen, but it was soon on the back foot after the Bank of Japan expanded a round of bond purchases, The BOJ expanded bond buying on Tuesday, and offered to increase a round of purchases across the curve on Wednesday, to knock the yield on the 10-year Japanese government bond (JGB) back to its 0.25% cap. The central bank's resolve to keep yields low has helped drive the yen down to 24-year lows against the dollar, as investors have focused on the gap between Japan's ultra-low interest rates and expectations of aggressive hikes by the U.S. Federal Reserve. Strong resistance can be seen at 135.10 (23.6%fib), an upside break can trigger rise towards 135.91(Higher BB).On the downside, immediate support is seen at 133.91 (38.2%fib), a break below could take the pair towards 132.23(11DMA).

Equities Recap

European equities dipped on Tuesday on growing fears that the expected aggressive rate hikes by the U.S. Federal Reserve would push the economy into a recession..

At (GMT 10:50 ),UK's benchmark FTSE 100 was last trading down at 0.77 percent, Germany's Dax was down  by 0.61 percent, France’s CAC finished was down by 1.12 percent.

Commodities Recap

Gold prices steadied after early losses on Tuesday as a pullback in the dollar provided some respite, but expectations the Federal Reserve will resort to aggressive policy tightening to tame inflation capped gains.

Spot gold rose 0.3% to $1,823.49 per ounce by 0932 GMT, after falling to its lowest since May 19 at $1,810.90 earlier in the session.U.S. gold futures shed 0.4% to $1,825.30 per ounce.

Oil prices rose on Tuesday as tight global supply outweighed worries that fuel demand would be hit by a possible recession and fresh COVID-19 curbs in China.

Brent crude futures rose 94 cents, or 0.9%, to $123.21 a barrel at 1029 GMT, while U.S. West Texas Intermediate (WTI) crude rose 79 cents, or 0.7% to $121.72 a barrel.


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