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Europe Roundup: Euro falls after weak Eurozone inflation data, European stocks jumps,Gold firms, Oil hits highest since late Feb on Saudi cuts, U.S. stock draw-January 7th,2020

Market Roundup

•German Nov Factory Orders (MoM)  2.3%, -1.2% forecast, 2.9% previous

•Sweden Dec Services PMI (MoM)  56.6, 58.6 previous

•Switzerland Nov Retail Sales (YoY)  1.7% , 3.1% previous

•German Dec IHS Markit Construction PMI  47.1, 45.6 previous

•UK Housing Equity Withdrawal (QoQ) -7.0B, -7.7B previous

•UK Dec Construction PMI  54.6, 55.0 forecast, 54.7 previous

•Italian Dec CPI (YoY)  -0.1%, -0.2% previous

•Italian Dec HICP (MoM)  0.2%, 0.3% forecast, 0.0% previous

•Italian Dec HICP (YoY)  -0.3%, -0.3% forecast, -0.3% previous

•EU Nov Retail Sales (MoM)  -6.1%, -3.4% forecast, 1.5% previous

•EU Dec Core CPI (YoY)  0.2%,0.2% forecast, 0.2% previous

•EU Dec Services Sentiment  -17.4, -15.0 forecast, -17.3 previous

•EU Dec Consumer Confidence  -13.9, -13.9 forecast, -13.9 previous

•EU Dec CPI (YoY)  -0.3%,-0.2% forecast, -0.3% previous

Looking Ahead – Economic Data (GMT)

•13:30 Canada Nov Trade Balance  -3.50B forecast, -3.76B previous

•13:30 US  Imports 245.10B previous

•13:30 US Exports 182.00B previous

•13:30 US Jobless Claims 4-Week Avg 836.75K previous

 •13:30 US Initial Jobless Claims 800K forecast, 787K previous

•13:30 US Continuing Jobless Claims 5,200K forecast, 5,219K previous

•13:30 Canada Nov Exports  46.47B previous

•13:30 Canada Nov Imports  50.23B previous

•13:30 US Nov Trade Balance   -65.20B forecast, -63.10B previous

•14:00 Brazil Dec Auto Production (MoM)  0.7% previous

•14:00 Brazil Dec Auto Sales (MoM)  4.6% previous

•15:00 Canada Dec Ivey PMI n.s.a  52.4 previous

•15:00 US Dec ISM Non-Manufacturing PMI  54.6 forecast, 55.9 previous

•15:00 US Dec ISM Non-Manufacturing Business Activity  55.0 forecast, 58.0 previous

•15:00 US Dec ISM Non-Manufacturing Employment  51.5 previous

•15:00 US ISM Non-Manufacturing New Orders  57.2 previous

•15:00 Canada Dec Ivey PMI  54.7 forecast, 52.7 previous

•US Natural Gas Storage -114B previous

Looking Ahead - Economic events and other releases (GMT)

•17:00 US FOMC Member Bullard Speaks

•14:00 FOMC Member Harker Speaks

EUR/USD: The euro declined against dollar on Thursday as weak inflation data weighed on euro. Economic sentiment in the euro zone improved as expected in December, but consumer price trends stayed in negative territory, below analysts’ consensus forecast. Todays inflation reading could be the last negative figure in the current cycle as a temporary German value added tax cut expired at the end of 2020 and crude oil prices are up around 45% since the start of November. Immediate resistance can be seen at 1.2356 (23.6%fib), an upside break can trigger rise towards 1.2400(Psychological level).On the downside, immediate support is seen at 1.2238 (38.2%fib), a break below could take the pair towards 1.2162 (50%fib).

GBP/USD: Sterling held below a 2-1/2 year high on Thursday as speculation swirled that the Bank of England could bring in sub-zero benchmark interest rates earlier to counter the economic hit from a third coronavirus national lockdown.The pound has shed some of its post-Brexit trade deal gains this week, as traders refocussed on the impact of the COVID-19 crisis after restrictions in Britain were tightened. Sterling edged lower against the dollar, trading around the $1.3589 mark.  It climbed above $1.37 for the first time since May 2018 on Monday. Immediate resistance can be seen at 1.3682 (100 DMA), an upside break can trigger rise towards 1.3759 (Higher BB).On the downside, immediate support is seen at 1.3595 (38.2%fib), a break below could take the pair towards 1.3523 (50%fib).

USD/CHF: The dollar strengthened against the Swiss franc on Thursday as investors bet Democrat control of the U.S. Congress would enable President-elect Joe Biden to borrow and spend heavily. The dollar had sunk on the Georgia results to a near-three year low against a basket of six major currencies, with traders betting growing U.S. trade and budget deficits would weigh on the greenback. On Thursday it bounced 0.59% to 0.8833. Immediate resistance can be seen at 0.8834(38.2%fib), an upside break can trigger rise towards 0.8857 (11DMA).On the downside, immediate support is seen at 0.8773 (23.6%fib), a break below could take the pair towards 0.8700(Psychological level).

USD/JPY: The dollar strengthened against the Japanese yen on Thursday as demand for greenback increased after violence on Capitol Hill and profit-taking by investors who had been betting on the yen. Hundreds of President Donald Trump’s supporters stormed the U.S. Capitol on Wednesday in a bid to overturn his election defeat, battling police in the hallways and delaying the certification of Democratic President-elect Joe Biden’s victory for hours. The dollar index, which measures the U.S. currency against a basket of peers, rose 0.6% to 89.886. At (GMT 12:40), the yen was last down 0.57 % at 103.59. Strong resistance can be seen at 103.75(38.2%fib), an upside break can trigger rise towards 104.10 (50%fib).On the downside, immediate support is seen at 103.27(38.2%fib), a break below could take the pair towards 102.91  (Daily low).

Equities Recap

European stocks climbed for a second straight session on Thursday, as construction stocks gained on upbeat sales forecast from Saint Gobain and commodity-linked shares rose on hopes of larger U.S. stimulus after Democrats won Senate control.

At (GMT 12:40 ),UK's benchmark FTSE 100 was last trading down at 0.44 percent, Germany's Dax was up  by 0.49 percent, France’s CAC finished was up by 0.44 percent.

Commodities Recap

Gold prices rose on Thursday as a Democrat sweep of Georgia’s Senate runoffs boosted expectations of additional U.S. stimulus, although soaring Treasury yields held back bullion below a two-month high scaled in the previous session.

Spot gold advanced 0.4% to $1,925.90 per ounce by 0652 GMT. U.S. gold futures climbed 1% to $1,927.10.

Oil prices hit their highest since late February on Thursday after a fall in U.S. stockpiles added further support following the unilateral decision by Saudi Arabia to cut output.

Brent crude was up 18 cents, or 0.3%, at $54.48 a barrel at 1015 GMT after earlier touching $54.90, levels not seen since before the the first COVID-19 lockdowns in the West.

U.S. West Texas Intermediate (WTI) rose as far as $51.28 and was last up 33 cents, or 0.7% at $50.96.

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