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Europe Roundup: Sterling edges higher, rate hike outlook remains in focus , European shares edge lower, Gold consolidates, Oil slips amid chance of Iran nuclear deal supply boost-August 9th,2022

Market Roundup

•Spanish 12-Month Letras Auction 0.781%, 0.687% previous

•Spanish 6-Month Letras Auction 0.449%,  0.117% previous

Looking Ahead - Economic Data (GMT)

• 12:30 US Unit Labor Costs (QoQ) (Q2) 9.5% forecast, 12.6% previous

• 12:30 US Nonfarm Productivity (QoQ) (Q2) -4.7% forecast, -7.3% previous

• 12:45 US Redbook (YoY) 15.5% previous

•14:00 US  IBD/TIPP Economic Optimism  40.2 forecast, 38.5 previous

•16:00  US EIA Short-Term Energy Outlook  previous

•17:00 US  3-Year Note Auction 3.093% previous

Looking Ahead - Economic events and other releases (GMT)

•No significant events


EUR/USD: The euro edged higher on Tuesday   as traders raised their bets on an interest rate hike by the European Central Bank (ECB) in September and markets sought direction on the eve of a critical U.S. inflation report. Stronger-than-expected U.S. jobs data fuelled expectations of another large, 75 basis-point (bps) U.S. rate hike in September, sending euro lower last week, but drop on Monday reversed. On Tuesday, bets on ECB rate hikes increased again, with traders pricing in over a 95% chance of a 50 bp hike at the bank's September meeting, data showed, up from around a 50% chance last week. At 1050 GMT, the euro was up around 0.35% at $1.0226. Immediate resistance can be seen at 1.0254(38.2%fib), an upside break can trigger rise towards 1.0301(Aug 5th high).On the downside, immediate support is seen at 1.0190(50%fib), a break below could take the pair towards 1.0168(61.8%fib).

GBP/USD: Sterling strengthened against a slightly weaker dollar on Tuesday, with the outlook for UK interest rates in focus after a Bank of England official flagged a further increase.BoE Deputy Governor Dave Ramsden said the bank will probably have to raise interest rates further from their current 14-year-high to tackle inflation pressures that are gaining a foothold in Britain’s economy. The central bank lifted rates by a large 50 basis points last week but warned of an incoming recession. By 0918 GMT, sterling was up 0.4% versus a slightly weaker dollar to $1.2128. Immediate resistance can be seen at 1.2105(14DMA), an upside break can trigger rise towards 1.2133(38.2%fib).On the downside, immediate support is seen at 1.2062(50%fib),a break below could take the pair towards 1.1998(50%fib).

 USD/CHF: The dollar dipped against the Swiss franc on Tuesday as traders reluctant to push the greenback higher without further signs that another aggressive interest rate hikes from the Federal Reserve was coming in September.U.S. inflation data on Wednesday was shaping up as the next key test for the dollar, which rose sharply after Friday's unexpectedly strong jobs report fuelled bets on another 75 bps Fed rate hike. That left the dollar index , which measures the currency's value against a basket of other peers, 0.2% lower at 106.15. It held below a more than one-week peak hit on Friday at 106.93. Immediate resistance can be seen at 0.9578(14DMA), an upside break can trigger rise towards 0.9622(50%fib).On the downside, immediate support is seen at 0.9514 (23.6%fib), a break below could take the pair towards 0.9447 (Lower BB).

USD/JPY: The dollar edged higher against yen on Tuesday as investors eyed U.S. inflation data due a day later that will likely yield clues to any further aggressive Federal Reserve rate hikes. The stakes are high for the July U.S. consumer prices report on Wednesday after an unexpectedly strong U.S. jobs data last week boosted expectations of a sharp interest rate increase to tackle soaring inflation. Investors awaited the consumer price data to gauge whether the Fed might ease slightly in its inflation fight and provide a better footing for the economy to grow. Strong resistance can be seen at 135.42(50%fib), an upside break can trigger rise towards 136.00(Psychological level).On the downside, immediate support is seen at 134.82 (14DMA), a break below could take the pair towards 134.22 (38.2%fib).


European shares edged lower at the open on Tuesday as value stocks struggled to extend a bounce from the start of the week, with investors cautiously waiting for key U.S. inflation data later in the week for hints on the Federal Reserve's next move.

At (GMT 12:01),UK's benchmark FTSE 100 was last trading up at 0.01% percent, Germany's Dax was up by  1.15% percent, France’s CAC was down by 0.51% %percent.

Commodities Recap

Gold consolidated in a narrow range on Tuesday, buoyed by a softer dollar but held back as investors refrained from big bets until the release this week of U.S. inflation data expected to influence the pace of interest rate hikes.

Spot gold edged 0.2% higher to $1,791.16 per ounce by 1106 GMT. U.S. gold futures rose 0.1% to $1,807.10.

Oil prices slipped on Tuesday as traders eyed the latest progress in last-ditch talks to revive the 2015 nuclear accord with Iran, which would clear the way to boost its crude exports in a tight market.

Brent crude  futures were down 86 cents, or 0.9%, at $95.79 a barrel at 0725 GMT, after gaining 1.8% in the previous session.

U.S. West Texas Intermediate (WTI) crude CLc1 futures declined 88 cents, or 1%, to $89.88 a barrel, after climbing 2% in the previous session.

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