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Europe Roundup: Euro gains on ECB rate hike, European shares gains, Gold hits more than one-week high, Oil supported by supply threats -September 9th,2022

Market Roundup

• Greek Jul Industrial Production (YoY) 7.0%, 8.4% previous

• Greek Aug HICP (YoY) 11.2%,  11.3% previous

•Greek Aug CPI (YoY)  11.4%, 11.6% previous

Looking Ahead - Economic Data (GMT)

•12:30 Canada Aug Employment Change 15.0K forecast, -30.6K previous

•12:30 Canada Aug Unemployment Rate 5.0%   forecast, 4.9% previous

•12:30 Canada Aug Capacity Utilization Rate (Q2) 82.0% previous

•12:30 Canada Aug Participation Rate  64.7% previous

•12:30 Canada Aug Full Employment Change  -13.1K previous

•12:30 Canada Aug Part Time Employment Change -17.5K previous

•  14:00 US Jul Wholesale Trade Sales (MoM)  1.4% forecast, 1.8% previous

•  14:00 US  Wholesale Inventories (MoM) 0.8% forecast,  1.8% previous

• 17:00 US  U.S. Baker Hughes Oil Rig Count  596 previous

•17:00 US U.S. Baker Hughes Total Rig Count 760 previous

Looking Ahead - Economic events and other releases (GMT)

•16:00 US FOMC Member George Speaks

•16:00 US  Fed Waller Speak


EUR/USD: The euro rose back above parity to a three-week high against the dollar on Friday following a large rate hike and hawkish comments from the European Central Bank. The euro was plotting 1.2% gains for the week after the ECB raised rates by a record 75 basis points on Thursday and signalled further hikes to fight inflation, even as the bloc's economy eyed a winter recession The euro rose 0.73% to $1.0065 , slightly below earlier highs, but off two-decade lows of $0.9864 hit earlier this week .Immediate resistance can be seen at 1.0044(21DMA), an upside break can trigger rise towards 1.0064(23.6%fib).On the downside, immediate support is seen at 0.9990(38.2%fib), a break below could take the pair towards 0.9924(50%fib).

GBP/USD: Sterling jumped against the dollar on Friday, as most majors fought back against the greenback’s recent strength, capping a volatile week in which the pound hit a 35-year low, Britain saw a new prime minister, and Queen Elizabeth passed away. Britain’s new Prime Minister Liz Truss contributed to the broader narrative of action from European governments on Thursday, announcing a plan to consumer energy bills for two years and funnel billions to prop up power companies.Investors are still waiting to see specific details of how the plan will be financed, as well as seeing how Truss and her new government will handle a very difficult situation with surging inflation and a slowing economy. Immediate resistance can be seen at 1.1567(38.2%fib), an upside break can trigger rise towards 1.1667(23.6%fib).On the downside, immediate support is seen at 1.1477(50%fib),a break below could take the pair towards 1.1328(61.8%fib).

 USD/CHF: The dollar declined against Swiss franc on Friday as markets digested hawkish comments from the U.S. Federal Reserve chief and investors looked to U.S. inflation data early next week. Investor focus now shifts to August U.S. consumer price index report due next week after recent hawkish comments from Fed Chair Jerome Powell cemented bets of a large interest rate hike to fight inflation. U.S. rate futures have priced in an 85% chance the Fed will hike by another 75 basis points at this month's meeting, which would increase the Fed funds rate to a 3.0%-3.25% range. That is up from a 77% probability a day ago. Immediate resistance can be seen at 0.9647(38.2%fib), an upside break can trigger rise towards 0.9704(Daily high).On the downside, immediate support is seen at 0.9556(50%fib), a break below could take the pair towards 0.9475(61.8% fib).

 USD/JPY: The dollar rose   against yen on Thursday as investors looked for fresh insight on the global monetary tightening path from a European Central Bank rate decision and comments from the head of the Federal Reserve. Bank of Japan Governor Haruhiko Kuroda said on Friday that rapid yen moves were undesirable after a meeting with Prime Minister Fumio Kishida. The Japanese yen was headed for its best daily jump in a month, up 1.5% to 141.985 yen per dollar , as it clawed away from recent 24-year lows. The dollar dropped 1.2% against the yen to 142.32 , pulling back from recent 24-year highs.The Japanese currency has been a victim of the dovish monetary stance from the Bank of Japan, in contrast with rate hikes elsewhere. Strong resistance can be seen at 142.74(38.2%fib), an upside break can trigger rise towards 144.40(23.6%fib).On the downside, immediate support is seen at 143.01(38.2%fib), a break below could take the pair towards 141.56(50%fib).

Equities Recap

European shares rose on Friday, with banks extending gains a day after the European Central Bank reinforced its fight against inflation with an unprecedented large interest rate hike.

At (GMT 12:20),UK's benchmark FTSE 100 was last trading up at 1.54 percent, Germany's Dax was up by 1.55 percent, France’s CAC finished was up by 1.60  percent.

Commodities Recap

Gold prices rose over 1% on Friday to a more than one-week high as a weaker dollar boosted demand for the yellow metal, even as U.S. Federal Reserve policymakers vowed to raise interest rates to tame inflation pressures.

Spot gold rose 1.1% to $1,725.89 per ounce by 1132 GMT. Bullion was heading for its first weekly gain in four, up 8% so far this week.U.S. gold futures gained 1% to $1,737.30.

Oil rose on Friday supported by real and threatened cuts to supply, although crude was set for a second weekly decline as aggressive interest rate hikes and China's COVID-19 curbs weighed on the demand outlook.

Brent crude rose $1.36, or 1.5%, to $90.51 a barrel by 1200 GMT. U.S. West Texas Intermediate (WTI) crude climbed $1.55, or 1.9%, to $85.09.

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