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  |   Market Roundups


Market Roundup: Sterling rises as BoE's Pill sees further rate rises ahead, European shares gain, Gold dips, Oil rises on market caution over tight supply-June 21st,2022

Market Roundup

•Finnish May Unemployment Rate 7.9% ,6.2% previous

•Swiss May Trade Balance 2.000B, 4.126B previous

•EU Apr Current Account -5.8B,-1.6B previous

• EU Apr Current Account n.s.a -5.4B, 8.7B previous

•UK Jun CBI Industrial Trends Orders 18 , 22 forecast, 26 previous

Looking Ahead Economic Data(GMT)

•12:30 Canada Apr Core Retail Sales (MoM) 0.6% forecast, 2.4% previous

• 12:30 Canada Retail Apr Sales (MoM) 0.8% forecast, 0.2% previous

•12:30 Canada May Housing Price Index (MoM) 0.6% forecast, 0.3% previous

•12:30 US May Chicago Fed National Activity 0.47

• 14:00 US Existing Home Sales 5.39M forecast, 5.61M previous

• 14:00 US May Existing Home Sales (MoM) -2.4% previous

•15:00 New Zealand GlobalDairy Trade Price Index 1.5% previous

•15:30 US 3-Month Bill Auction 1.640% previous

•15:30 US 6-Month Bill Auction 1.490% previous

Looking Ahead - Events, Other Releases (GMT)

•11:30 ECB McCaul Speaks

•12:15 UK MPC Member Tenreyro Speaks

•15:00 US FOMC Member Barkin Speaks

•16:00 US FOMC Member Mester Speaks


EUR/USD: The euro rose on Tuesday, drawing support from the European Central Bank's plans to raise interest rates to contain inflation, while the yen slumped to a 24-year low as the Bank of Japan's ultra-loose monetary policy stance continued to weigh.The euro was 0.4% firmer at $1.0554 after ECB Chief Economist Philip Lane said the ECB will raise interest rates by 25 basis points at its July meeting, but the size of its September hike is still to be decided, suggesting a larger 50 basis point hike could be on the cards. Focus will be on Federal Reserve Chairman Jerome Powell's testimony before the Senate and the House as well as European business activity and UK inflation data later this week. Immediate resistance can be seen at 1.0578(38.2%fib),an upside break can trigger rise towards 1.0661(23.6%fib).On the downside, immediate support is seen at 1.0519(61.8%fib), a break below could take the pair towards 1.0441(61.8%fib).

GBP/USD: The pound rose against the U.S. dollar on Tuesday as hawkish comments from Bank of England policymakers continued to support the currency, with an equity rally also helping risk-sensitive sterling. BoE chief economist Huw Pill said on Tuesday the central bank would need to raise interest rates further in the near future to tackle surging inflation. After a three-week losing streak versus the dollar, the British pound rose 0.5% to $1.2310, moving away from a March 2020 low of $1.1934 touched last week. Markets are pricing in 184.50 basis points of BoE interest rates hikes by December. The BoE raised its benchmark interest rate by a quarter point to 1.25% on June 16 and said it was ready to act “forcefully” if needed to stamp out dangers posed by inflation. Immediate resistance can be seen at 1.2232(38.2%fib),an upside break can trigger rise towards 1.2432 (23.6%fib).On the downside, immediate support is seen at 1.2247(50%fib), a break below could take the pair towards 1.2120(61.8%fib).

USD/CHF: The dollar held near recent lows against the Swiss franc on Monday as investors paused for breath after a steep selloff, but concerns remain about aggressive central bank interest rate hikes and risks of a global recession. Central banks around the world are looking to raise interest rates aggressively to curb rising inflation, a sentiment underscored on Tuesday by Reserve Bank of Australia (RBA) Governor Philip Lowe, who pointed in a speech to further rate hikes. Continuing the central bank theme, two Federal Reserve policy makers are due to speak later in the day, as are two speakers from the Bank of England, with traders watching their remarks closely for clues about the interest rate trajectory. Immediate resistance can be seen at 0.923 (5DMA), an upside break can trigger rise towards 0.9745(38.2%fib).On the downside, immediate support is seen at 0.9621(50%fib), a break below could take the pair towards 0.9564(June 3rd low).

USD/JPY: The dollar strengthened on Monday as yen continued to weaken after the Bank of Japan on Friday dashed any mild expectations of a change in policy and renewed its commitment to ultra-easy monetary settings. Japanese Prime Minister Fumio Kishida said on Tuesday the central bank should maintain its ultra-loose monetary policy, brushing aside opposition calls that the policy be tweaked to target Japan's rising cost of living.Kishida said the recent sharp falls in the yen were worrying but monetary policy and exchange rates must be dealt with separately, while fiscal policy should take the principle role in addressing the impact of rising prices. Strong resistance can be seen at 136.62 (23.6%fib), an upside break can trigger rise towards 137.76(Higher BB).On the downside, immediate support is seen at 134.73(38.2%fib), a break below could take the pair towards 134.35(11DMA).

Equities Recap

European equities extended gains on Tuesday, helped by chemical and commodity-linked sectors, as last week's brutal selloff on recession fears attracted investors looking for bargains.

At (GMT 12:06),UK's benchmark FTSE 100 was last trading up at 0.49 percent, Germany's Dax was up by 0.43 percent, France’s CAC was up by 0.92 percent.

Commodities Recap

Gold prices eased on Tuesday as headwinds from an uptick in U.S. Treasury yields amid prospects of more interest rate hikes offset support from a retreat in the dollar.

Spot gold fell 0.1% to $1,836.12 per ounce by 1006 GMT. U.S. gold futures were flat at $1,839.50.

Oil prices rose 1% on Tuesday, clawing back more of last week's losses as investors focused on tight supplies of crude and fuel products rather than concerns about a recession dampening demand going forward.

Brent crude futures rose $1.08, or about 1%, to $115.21 a barrel at 0400 GMT, adding to a 0.9% gain on Monday. The benchmark contract fell 7.3% last week in its first weekly fall in five.

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