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Europe Roundup: Euro hits 11-week high against dollar, European shares gains, Gold slips on recovery hopes. Oil prices rise ahead of OPEC+ meeting on output cuts-June 2nd 2020

Market Roundup

• UK May Nationwide HPI (MoM) -1.7% , -1.0% forecast,0.7% previous

• UK May Nationwide HPI (YoY)  1.8%,2.8% forecast, 3.7% previous

• Swiss April  Retail Sales (YoY)      -19.9%,-5.6% previous

• French April Government Budget Balance  -92.1B, -52.5B previous

• Spanish Unemployment Change 26.6K    , 282.9K previous

 • UK April BoE Consumer Credit  -7.399B, -4.500B forecast, -3.841B previous

• UK April Mortgage Lending  0.29B, 1.15B forecast, 4.80B previous

• UK April Mortgage Approvals  15.85K, 23.78K forecast, 56.16K previous

Looking Ahead Economic Data

• 12:55 US Redbook (YoY) -5.5% previous

• 12:55 US Redbook (MoM) -1.5% previous

• 13:00 French 12-Month BTF Auction -0.517% previous

• 13:00 US May ISM NY Business Conditions 4.3% previous

• 13:00 US May ISM-New York Index 826.5 previous

• 15:20 New Zealand GlobalDairyTrade Price Index 1.0% forecast ,1.0% previous

Looking Ahead - Events, Other Releases (GMT)

• No significant events


EUR/USD: The euro reached an 11-week high on Tuesday as the dollar lost ground, with investors maintaining their hopes for a global economic recovery. The optimism persisted within markets despite growing concern over U.S.-China tensions and mass protests across the United States over the death of a black man in police custody. Traders remain hopeful that central banks will continue to buy government bonds and other financial assets to protect their economies from the coronavirus pandemic. Immediate resistance can be seen at 1.1196 (61.8% fib), an upside break can trigger rise towards 1.1235 (March 16th high).On the downside, immediate support is seen at 1.1106 (50 % fib), a break below could take the pair towards 1.1060 (38.2% fib).

GBP/USD: Sterling climbed above $1.25 to its highest in a month against the dollar on Tuesday, as signs Britain might be willing to compromise on sticking points in a fresh round of Brexit negotiations with the European Union provided support.Britain is expected to indicate flexibility over fisheries and trade rules if the European Union agrees to lessen its “maximalist” demands regarding regulatory alignment and fishing access, the Times newspaper reported on Tuesday, as a new round of talks kicks off. Britain has until July 1 to ask for an extension to the current transition period, which ends in December. Immediate resistance can be seen at 1.2576 (61.8% fib), an upside break can trigger rise towards 1.2657 (200 DMA).On the downside, immediate support is seen at 1.2531 (5 DMA), a break below could take the pair towards 1.2389 (5 DMA).

USD/CHF: The dollar edged higher against the Swiss franc on Tuesday as the global coronavirus recovery effort won out over U.S.-China tensions and the worst civil unrest in the United States in decades. U.S. President Donald Trump’s vow to use force to end violent protests in American cities and reports China had ordered U.S. soybean purchases to be halted had checked Asia overnight, but Europe got the bulls back on track. Immediate resistance can be seen at 0.9630 (38.2 % fib), an upside break can trigger rise towards 0.9661 (11DMA).On the downside, immediate support is seen at 0.9580  (Lower BB), a break below could take the pair towards 0.9542 (50% fib ).

USD/JPY: The dollar edged higher against the Japanese yen on Tuesday as demand for yen decreased on hopes for global economic recovery despite Sino-U.S. tensions. Tensions between the world's two largest economies, however, remained in focus as reports of an order from China's government to halt U.S. soybean purchases raised concerns that a trade deal between the two countries could be in jeopardy. The safe-haven Japanese yen fell 0.1% versus the dollar to 109.71. Strong resistance can be seen at 107.90 (38.2% fib), an upside break can trigger rise towards 108.53 (Higher BB).On the downside, immediate support is seen at 107.25 (21 DMA), a break below could take the pair towards 106.91 (61.8% fib).

Equities Recap

European shares inched closer to a three-month high on Tuesday on optimism around a post-coronavirus economic recovery, with German stocks buoyed by a jump for Lufthansa.

At (GMT 12:00 ),UK's benchmark FTSE 100 was last trading up at 0.96 percent, Germany's Dax was up by 3.69 percent, France’s CAC finished was up by 1.95 percent.

Commodities Recap

Gold prices slipped on Tuesday as hopes for a gradual recovery in economic growth rose following easing of lockdowns, though deteriorating U.S.-China relations and fears over the spread of the coronavirus amid protests in the United States limited losses.

Spot gold was down 0.3% at $1,734.66 per ounce as of 0819 GMT. U.S. gold futures fell 0.2% to $1,746.10.

Oil prices rose on Tuesday to near three-month highs on expectations that major producers would agree to extend output cuts that have shored up prices, during a video conference likely to be held this week.

Benchmark Brent crude rose 2.5%, or 97 cents, to $39.29 a barrel as of 1100 GMT.U.S. West Texas Intermediate (WTI) crude also climbed 2.5%, or 88 cents, to $36.32 a barrel.

Treasuries Recap

Demand for German government debt increased on Tuesday and yields fell across the euro zone as a whole, as Monday’s global risk-on mood started to fade and investor attention focused on the European Central Bank’s meeting on Thursday.

Safe-haven German 10-year bond yields, which yesterday rose 5 bps to a three week-high of -0.39%, were last down 3 bps at -0.42%.

Italian government bond yields were flat, with the 10-year yield last down around one basis point, at 1.46%.

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