Europe Roundup: Pound gains after British jobs data, European shares steady, Gold slips,Oil steadies as IEA turns more bullish on oil demand

Market Roundup

•UK Mar Average Earnings Index +Bonus 5.8%, 5.8%forecast,5.9% previous

•UK Labour Productivity -1.4% forecast, 0.4% previous

•UK Apr Claimant Count Change 46.7K,31.2K forecast,28.2K previous

•UK Mar Average Earnings ex Bonus 6.7%,6.8% forecast,6.6% previous

•UK Mar Unemployment Rate 3.9%,3.8% forecast,3.8% previous

•UK Mar Employment Change 3M/3M (MoM) 182K,160K forecast,169K previous

•Italian Apr HICP (YoY) 8.7%,8.8% forecast,8.1% previous

•Italian Apr CPI (YoY) 8.2%,8.3% forecast,7.6% previous

•Italian Apr CPI (MoM) 0.4%,0.5% forecast,-0.4% previous

•German May ZEW Economic Sentiment -10.7, -5.3 forecast,4.1 previous

•EU Employment Change (YoY) 1.7%, 0.4% forecast, 1.5% previous

•EU Employment Change (QoQ) 0.3% forecast,0.3% previous

•EU May ZEW Economic Sentiment -9.4, -1.0 forecast, 6.4 previous

•EU GDP (YoY) (Q1)1.3%, 1.3% forecast, 1.3% previous

•EU Mar Trade Balance 25.6B forecast, 4.6B previous

•German May ZEW Current Conditions -34.8,-37.0 forecast,-32.5 previous

•EU GDP (QoQ) (Q1) 0.1%,0.1% forecast,0.3% previous

Looking Ahead Economic Data(GMT)

•12:30 US Apr Retail Sales Ex Gas/Autos (MoM) 0.2% forecast, -0.3% previous

•12:30 Canada Mar Manufacturing Sales (MoM) 0.7% forecast,-3.6% previous

•12:30 US Apr Retail Sales (YoY) 4.20% forecast,2.94% previous

•12:30 Canada Apr Median CPI (YoY) 4.3% forecast,4.6% previous

•12:30 Canada Apr Trimmed CPI (YoY) 4.1% forecast,4.4% previous

•12:30 Canada Apr Common CPI (YoY) 5.5% forecast,5.9% previous

•12:30 Canada Apr CPI (YoY) 4.1% forecast,4.3% previous

•12:30 US Apr Core Retail Sales (MoM) 0.4% forecast,-0.4% previous

•12:30 Canada Apr CPI (MoM) 0.4% forecast, 0.5% previous

•12:30 US Apr Retail Sales (MoM) 0.8% forecast,-0.6% previous

•12:30 Canada Apr Retail Control (MoM) 0.3% forecast,-0.3% previous

•12:30 Canada Apr Core CPI (YoY) 4.4% forecast,4.3% previous

•12:30 Canada Apr Core CPI (MoM) 0.6% previous

•12:55 US Redbook (YoY) 1.3% previous

•12:55 US FOMC Member Bostic Speaks

•13:15 US Apr Industrial Production (MoM) -0.1% forecast,0.4% previous

•13:15 US Apr Capacity Utilization Rate 79.7% forecast,79.8% previous

•13:15 US Apr Manufacturing Production (MoM) 0.1% forecast,-0.5% previous

•13:15 US Apr Industrial Production (YoY) 0.53% previous

•13:45 EU ECB Supervisory Board Member Tuominen Speaks

•14:00 US May NAHB Housing Market Index 45 forecast,45 previous

•14:00 US Mar Retail Inventories Ex Auto 0.4% forecast,0.4% previous

•14:00 US Mar Business Inventories (MoM) 0.1% forecast,0.2% previous

Looking Ahead Events And Other Release (GMT)

•14:00 EU ECB President Lagarde Speaks

•16:15 US FOMC Member Williams Speaks

•19:15 US Fed Logan Speaks

•23:00 US FOMC Member Bostic Speaks

Currency Forecast

EUR/USD: The euro edged higher on Tuesday as investors balanced concerns about stubborn euro area inflation against expectations that the Federal Reserve might end its policy-tightening cycle in June. Investors are also focused on the Fed’s next moves after U.S. central bankers on Monday signalled they see interest rates staying high and, if anything, going higher, given inflation that may be slow to improve and an economy showing only tentative signs of weakness. Immediate resistance can be seen at 1.0898(5DMA), an upside break can trigger rise towards 1.1000(Psychological level).On the downside, immediate support is seen at 1.0844 (May 16th low ), a break below could take the pair towards 1.0818(Lower BB).

GBP/USD: The pound initially dipped but recovered on Tuesday after data showed a rise in the UK unemployment rate, which could take some of the pressure off the Bank of England to raise interest rates. Britain’s unemployment rate unexpectedly rose to 3.9% in the three months to March as more people sought to get back into the jobs market, driving the first fall in total payrolled employees in more than two years in April. Markets are attaching a 68% chance that the BoE will raise rates by a quarter of a point to 4.75% and a 32% chance of no change. Sterling fell to a session low of $1.2466 before recovering to trade last at 1.2535. Immediate resistance can be seen at 1.2528 (5DMA), an upside break can trigger rise towards 1.2638 (11th May High).On the downside, immediate support is seen at 1.2446(50%fib), a break below could take the pair towards 1.2377(Lower BB).

USD/CHF: The dollar dipped against Swiss franc on Tuesday as greenback was weighed down by the risk of a U.S. default as a standoff between Democrats and Republicans over raising the debt ceiling showed few signs of being resolved. U.S. President Joe Biden expressed confidence that a deal could be done in time for an expected meeting with congressional leaders later on Tuesday. However, Republican House of Representatives Speaker Kevin McCarthy said the two sides were still far apart. Immediate resistance can be seen at 0.8964(Daily high), an upside break can trigger rise towards 09007 (38.2%fib).On the downside, immediate support is seen at 0.8923 (21DMA), a break below could take the pair towards 0.8883(23.6%fib).

USD/JPY: The dollars eased against Japan's yen on Tuesday as market focus was also on developments in the debt-ceiling debate. President Joe Biden, Republican House of Representatives Speaker Kevin McCarthy and three other top congressional leaders will meet later on Tuesday for the critical debt ceiling discussion. Markets also took stock of U.S. Federal Reserve members playing down the possibility of rate cuts this year. Minneapolis Fed President Neel Kashkari said there was more work to be done to rein in inflation, while Atlanta Fed president Raphael Bostic played down chances of rate cuts this year. Strong resistance can be seen at 136.16(23.6%fib) an upside break can trigger rise towards 136.88(Higher BB).On the downside, immediate support is seen at 134.97(21DMA), a break below could take the pair towards 134.40(38.2%fib)

Equities Recap

European shares were largely steady on Tuesday with technology stocks offsetting declines in automakers, while investors awaited more data on the euro zone economy to gauge how far the European Central Bank will keep hiking interest rates.

At (GMT 10:17),UK's benchmark FTSE 100 was last trading up at 0.04 percent, Germany's Dax was up by 0.10 percent, France’s CAC was trading down by 0.03 percent.

Commodities Recap

Gold prices dropped on Tuesday after U.S. central bank officials indicated they expect interest rates to stay high, while investors looked ahead to a key meeting for the outcome of debt-ceiling negotiations in Washington.

Spot gold was down 0.5% at $2,009.89 per ounce by 0859 GMT, while U.S. gold futures fell 0.4% to $2,014.20.

Oil futures steadied on Tuesday as support from a higher global demand forecast from the International Energy Agency (IEA) was countered by weaker than expected Chinese economic data.

Brent crude futures eased by 11 cents, or 0.2%, to $75.12 a barrel by 0922 GMT while U.S. West Texas Intermediate crude was down 12 cents, or 0.2%, at $70.99.