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  |   Market Roundups


Europe Roundup: Euro falls ahead of ECB meeting, European shares inch lower, Gold gains, Oil drops on U.S. inventories and doubts over output cuts-June 3rd, 2020

Market Roundup

• Swiss May CPI (YoY)  -1.3%,-1.3% forecast, -1.1% previous    

• Swiss  May CPI (MoM)  0.0%,0.1% forecast, -0.4% previous    

• EU May  IHS Markit Construction PMI  40.1, 31.9 previous    

• UK May Construction PMI  28.9, 29.7 forecast, 8.2 previous    

• UK May Car Registration (MoM) 368.6%,-98.3% previous

• UK May Car Registration (YoY)  -89.0%,-97.3% previous

• EU April Retail Sales (YoY)  -19.6%,-22.3% forecast, -9.2% previous

• EU April Retail Sales (MoM)  -11.7%,-15.0% forecast, -11.2% previous

• EU June ECB Interest Rate Decision  0.00%,0.00% forecast, 0.00%  previous

Looking Ahead Economic Data

• 12:30 US Imports 232.20B previous 232.20B  previous

• 12:30 US Exports 187.80B previous

• 12:30 US Continuing Jobless Claims 20,050K forecast, 21,052K previous

• 12:30 US Jobless Claims 4-Week Avg 2,608.00K previous

• 12:30 US Initial Jobless Claims 1,800K, 2,123K previous

• 12:30 Canada April Exports 42.07B forecast, 46.26B previous

• 12:30 US   Nonfarm Productivity (QoQ) (Q1) -2.7% forecast,1.2% previous

• 12:30 US Unit Labor Costs (QoQ) (Q1) 5.0% forecast, 0.9% previous

• 12:30 Canada April Imports  41.37B forecast, 47.67B previous

• 12:30 US April Trade Balance  -49.00B forecast, -44.40B previous

• 13:00 Brazil Auto Production (MoM) -99.0% previous

• 13:00 Brazil Auto Sales (MoM) -67.7% previous

Looking Ahead - Events, Other Releases (GMT)

• 12:30 ECB Press Conference

• 18:00 Canada BoC Deputy Governor Gravelle Speaks


EUR/USD: The euro declined against dollar on Thursday ahead of a European Central Bank meeting at which policymakers could step up stimulus measures.ECB is expected to increase the size of its 750 billion euro ($840 billion) Pandemic Emergency Purchase Programme to support Europe’s weakest economies  although some investors think this will happen at July’s meeting rather than today. The euro was at $1.2025 at 0720 GMT, down 0.3% and retreating from three-month highs. It has been supported recently by proposals for a 750 billion euro EU-wide recovery fund, made up of grants and loans, to share the cost of the coronavirus on hard-hit countries such as Italy and Spain. Immediate resistance can be seen at 1.1253 (June 3rd high), an upside break can trigger rise towards 1.1300 (Psychological level).On the downside, immediate support is seen at 1.1168 (61.8 % fib), a break below could take the pair towards 1.1134 (5 DMA).

GBP/USD: Sterling fell on Thursday as Britain and the European Union (EU) continued their Brexit negotiations, before the late June deadline by which the United Kingdom needs to say whether it wants an extension of the transition period. The pound had gained after British officials said the United Kingdom might be able to reach a compromise on fisheries with the EU earlier this week. An improvement in risk sentiment had also helped the pound, pushing it up more than 3% in one week. But a strengthening dollar and worries that Britain will exit the EU without a trade deal at the end of the year weighed on the British currency .Immediate resistance can be seen at 1.2616 (Higher BB), an upside break can trigger rise towards 1.2663 (200 DMA).On the downside, immediate support is seen at 1.2538 (61.8 %fib), a break below could take the pair towards 1.2463 (5 DMA).

USD/CHF: The dollar edged lower against the Swiss franc on Thursday as traders waited to hear how much more stimulus the European Central Bank plans to shovel out to address the coronavirus slump. The ECB is expected to pump in another 250-500 billion euros for the cause, but after weeks of sharp gains for stocks, oil and confidence-sensitive currencies, investors were taking the chance to lock in some profit. The ECB delivers its policy decision at 1145 GMT and its President, Christine Lagarde, holds a news conference at 1230 GMT. Immediate resistance can be seen at 0.9685(21 DMA), an upside break can trigger rise towards 0.9735 (23.6% fib).On the downside, immediate support is seen at 0.9545 (50% fib), a break below could take the pair towards 0.9458(61.8% fib ).

USD/JPY: The dollar was little changed against the Japanese yen on Thursday as a recent rally fuelled by hopes of an economic rebound ran out of steam and investors locked in profits. have dipped this week as the reopening of several global economies has reduced demand for Japanese yen and encouraged investors to venture into risky assets. The safe-haven Japanese yen fell to new two-month lows versus the U.S. dollar, at 108.90 at around 12:00 GMT .Strong resistance can be seen at 109.40 (23.6% fib), an upside break can trigger rise towards 110.00 (Psychological level).On the downside, immediate support is seen at 108.37 (200 DMA), a break below could take the pair towards 107.93 (38.2 % fib).

Equities Recap

A European stock market rally paused on Thursday, with investors focussing on a European Central Bank meeting where policymakers are expected to provide more aid for the battered euro zone economy.

At (GMT 12:00 ),UK's benchmark FTSE 100 was last trading up at 0.05 percent, Germany's Dax was up by 0.13 percent, France’s CAC was last up by 0.20 percent.

Commodities Recap

Gold prices rose on Thursday after an equity rally fuelled by signs of an economic recovery from mandated shutdowns sparked the biggest daily fall since April 30 in the previous session.

Spot gold climbed 0.4% to $1,703.95 per ounce by 0407 GMT after a 1.7% drop on Wednesday. U.S. gold futures inched up 0.1% to $1,705.70.

Oil prices dropped on Thursday on doubts over the ability of crude producers to agree to extend record output cuts, heightened by worries over a build in U.S. fuel inventories.

Brent crude futures eased by 29 cents to $39.50 a barrel by 0839 GMT, heading for its first fall in six sessions. U.S. West Texas Intermediate (WTI) crude  futures dropped 53 cents to $36.76.

Treasuries Recap

Euro zone bond yields held steady ahead of the ECB’s policy meeting where the bank is largely expected to expand its bond buying programme.

Germany’s 10-year bond yield was up 1 basis point to -0.34%, near seven-week highs. Italian 10-year yields were near one-week highs at 1.55%.

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