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Europe Roundup: Sterling falls to new low versus dollar, European stocks slump, Gold dips, Oil slips more than 2% on fears recession may hit demand-May 12th,2022

Market Roundup  

•UK Index of Services 0.4% ,0.9% forecast,  0.8% previous

•UK Monthly GDP 3M/3M Change 0.8% ,1.0% forecast, 1.0% previous

•UK GDP (MoM) -0.1% ,0.0% forecast, 0.1% previous

• U.K Mar Construction Output (YoY) 4.7% ,2.4% forecast, 6.1% previous

• U.K Business Investment (QoQ) (Q1) -0.5%, 1.8% forecast, 1.0% previous

• U.K Mar Trade Balance Non-EU   -13.80B ,-12.14B previous

• U.K Mar Trade Balance -23.90B ,-18.50B forecast, -20.59B previous

• U.K Mar Manufacturing Production (MoM) -0.2% ,-0.5% forecast, -0.4% previous

• U.K Mar Industrial Production (MoM) -0.2% ,0.1% forecast, -0.6% previous

• U.K GDP (YoY) (Q1) 8.7% ,9.0% forecast, 6.6% previous

• U.K GDP (QoQ) (Q1) 0.8% ,1.0% forecast, 1.3% previous

•Swiss Apr PPI (YoY)   1.3% ,6.1% previous

•Swiss Apr PPI (MoM)   6.7%,0.8% previous

Looking Ahead - Economic Data (GMT)

•12:30 US Apr PPI (MoM) 0.5% forecast, 1.4% previous

•12:30 US Apr PPI (YoY) 10.7%   forecast,11.2% previous

•12:30 US Apr Core PPI (MoM) 0.6% forecast, 1.0% previous

•12:30 US Apr Initial Jobless Claims 195K forecast, 200K previous

•12:30 US Continuing Jobless Claims 1,380K forecast, 1,384K previous

•12:30 US Jobless Claims 4-Week Avg 188.00K previous

•13:00 UK NIESR GDP Estimate -2.5% previous

•14:30 Natural Gas Storage 79B forecast,77B previous

•15:30 US 4-Week Bill Auction 0.490% previous

•15:30 US 8-Week Bill Auction 0.710% previous

Looking Ahead - Economic events and other releases (GMT)

•No significant events


EUR/USD: The euro declined against the U.S. dollar on Thursday as dollar benefited as the US inflation data confirmed expectations for further aggressive hikes in interest rates by the Federal Reserve. The euro dipped after receiving a lift overnight as the European Central Bank overnight firmed up expectations that it will raise its policy interest rate in July for the first time in more than a decade. Despite increasing expectations of a rate hike in July, the euro remained under pressure on fears that the war in Ukraine and rising energy prices could tip the eurozone into recession later this year. The euro fell 0.5% to $1.0434, after hitting its lowest since January 2017 at $1.044.Immediate resistance can be seen at 1.0527 (5DMA), an upside break can trigger rise towards 1.0549 (38.2%fib).On the downside, immediate support is seen at 1.0419(23.6%fib), a break below could take the pair towards 1.0380 (Lower BB).

GBP/USD: Sterling fell to a fresh two-year low versus a strengthening U.S. dollar on Thursday after a slew of economic data pointed to the weakening of the economy. Britain's economy unexpectedly shrank 0.1% in March after a slump in car sales due to supply-chain problems. Data also showed British employers added permanent staff last month at the weakest rate in more than a year suggesting the labour market might be cooling, according to a survey that will be noted by the Bank of England as it assesses inflation pressure. By 0758 GMT, the pound was down 0.4% at $1.2198 against the dollar, after touching its lowest level of $1.2181 since May 2020 minutes earlier. Immediate resistance can be seen at 1.2255(Daily high), an upside break can trigger rise towards 1.2299(38.2%fib).On the downside, immediate support is seen at 1.2177 (23.6%fib), a break below could take the pair towards 1.2094(Lower BB).

USD/CHF: The dollar strengthened against Swiss franc on Thursday as concerns that tighter monetary policies to tame surging inflation will hurt the global economy dampened risk sentiment and drove investors into the safe-haven currency. Data on Wednesday showed U.S. consumer price growth slowed sharply in April, suggesting that inflation had probably peaked, though it was likely to stay hot.The dollar benefited as the data confirmed expectations for further aggressive hikes in interest rates by the Federal Reserve and investors fretted that central bank tightening could slow global economic growth. Immediate resistance can be seen at  0.9968(23.6 % fib), an upside break can trigger rise towards 1.0002(Higher BB).On the downside, immediate support is seen at 0.9934(5DMA), a break below could take the pair towards 0.9883(38.2 % fib ).

USD/JPY: The dollar edged lower on Thursday as Japanese yen found support from an easing in long-term Treasury yields from a multi-year peak above 3.2% at the start of the week.Japan’s currency added about 0.2% to 129.67 per dollar, pulling further away from the more than two-decade low of 131.35 reached Monday, as the 10-year Treasury yield retreated to an almost two-week low of 2.862% in Tokyo trading on Thursday. A Bank of Japan policymaker said it was inappropriate to change monetary policy to control exchange rates, brushing aside the idea of countering sharp yen falls with interest rate hikes. Strong resistance can be seen at 130.16(23.6%fib), an upside break can trigger rise towards 130.88 (11th May High).On the downside, immediate support is seen at 128.43(38.2%fib), a break below could take the pair towards 127.45(30DMA).

Equities Recap

European stocks slumped on Thursday, echoing sharp losses on Wall Street overnight, after U.S. inflation data fuelled worries about the impact of rising interest rates on economic growth.

At (GMT 10:47),UK's benchmark FTSE 100 was last trading down  at 2.36 percent, Germany's Dax down  by 2.10 percent, France’s CAC finished was down by 2.50 percent.

Commodities Recap

Gold prices inched lower on Thursday as the dollar scaled a fresh two-decade peak after April U.S. inflation data bolstered expectations that the Federal Reserve would stick to its aggressive rate-hike roadmap.

Spot gold fell 0.2% to $1,848.15 per ounce by 0959 GMT. U.S. gold futures were down 0.2% at $1,849.20.

Oil prices dropped more than 2% on Thursday in a volatile week as recession fears dogged global financial markets, outweighing supply concerns and geopolitical tensions in Europe.

Brent crude was down $2.26, or 2.1%, to $105.25 a barrel at 0903 GMT. WTI crude fell $2.45, or 2.3%, to $103.26 a barrel.

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