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Europe Roundup:Euro edges higher as investors await Fed statement, European stocks gains,Gold rises, Oil jumps above $41 as storm hits U.S. output, inventories drop-September 16th,2020

Market Roundup

•UK Aug CPI (MoM)  -0.4% , -0.6% forecast, 0.4% previous

•UK Aug CPI, n.s.a  108.60, 109.10 previous

•UK Aug Core RPI (YoY)  0.8%,1.9% previous

•UK Aug Core CPI (YoY)  0.9%,0.6% forecast, 1.8% previous

•UK Aug PPI Output (MoM) 0.0%, 0.2% forecast, 0.3% previous

•UK Aug Core CPI MoM (MoM)  -0.6% , -0.9% forecast, 0.4% previous   

•UK Aug CPI (YoY)  0.2%,0.1% forecast, 1.0% previous

•UK Aug RPI (MoM)  -0.3%,-0.3% forecast, 0.5% previous

•UK RPI (YoY) 0.5%,0.6% forecast, 1.6% previous

•UK  Aug PPI Output (YoY)  -0.9%, -0.7% forecast, -0.9% previous

•UK  Aug PPI Input (MoM)  -0.4%,0.3% forecast, 1.8% previous               

•UK  House Price Index (YoY) 3.4%,2.6% previous                                          

•EU Jul Trade Balance  27.9B, 12.6B forecast, 21.2B previous

•US Mortgage Refinance Index 3,289.4 forecast, 3,415.1 previous

•US MBA Mortgage Applications (WoW) -2.5%,2.9% previous

•Canada Jul Foreign Securities Purchases  -8.52B,-13.52B previous

•US Aug Retail Sales (YoY) 2.57%,2.74% previous

•Canada Aug CPI (MoM) -0.1%,0.1%, 0.0% previous

•Canada Common CPI (YoY) 1.5%, 1.3% previous

•Canada Median CPI (YoY) 1.9%,1.9% previous

•Canada Trimmed CPI (YoY) 1.7%,1.7% previous

•Canada Jul Foreign Securities Purchases by Canadians 1.29B , 10.60B previous

•Canada Aug CPI (YoY) 0.4% forecast0.1%,0.1% previous

•US Aug Retail Sales Ex Gas/Autos (MoM)  0.7%,1.5% previous

•US Aug Retail Sales (MoM) 0.6%, 1.0% , 1.2% previous

•US Aug Core Retail Sales (MoM)  0.7%,0.9% forecast, 1.9% previous

•US Aug Retail Control (MoM)   0.5% forecast, 1.4% previous

•Canada Aug Core CPI (MoM)  -0.1% previous

Looking Ahead - Economic Data (GMT)

•14:00 US Sep NAHB Housing Market Index  78 forecast, 78 previous    

•14:00 US Jul Retail Inventories Ex Auto  0.6% previous

•14:00 US Jul Business Inventories (MoM)   0.1% forecast, -1.1% previous

•14:30 US Crude Oil Inventories 1.271M forecast, 2.032M previous

•18:00 US Fed Interest Rate Decision 0.25% forecast, 0.25% previous

Looking Ahead - Events, Other Releases (GMT)

•18:00 US FOMC Economic Projections

•18:00 US FOMC Statement

•18:30 US FOMC Press Conference


EUR/USD: The euro edged higher against dollar on Wednesday ahead of a U.S. Federal Reserve meeting at which market participants expect the world’s most influential policymakers to remain cautious on the economy ahead of the U.S. presidential election. The Federal Reserve is expected to wrap up its latest policy meeting on Wednesday with somewhat rosier economic forecasts but a renewed pledge to keep interest rates low for as long as the world’s biggest economy needs to recover from its deepest downturn in decades. Immediate resistance can be seen at 1.1894(61.8%fib), an upside break can trigger rise towards 1.1967 (18th Aug high).On the downside, immediate support is seen at 1.1841 (5DMA ), a break below could take the pair towards 1.1808 (50%fib).

GBP/USD The British pound held within striking distance of a two-month low on Wednesday before a Bank of England decision on Thursday against the backdrop of a darkening outlook for the economy.BoE is widely expected to hold fire, policymakers are likely to conclude that downside risks to the economy are rising for the economy due to rising Brexit uncertainty and renewed restrictions on social activity. Sterling had its worst week in six months last week, as investors grew more pessimistic about the chances of a Brexit deal being reached before the December 2020 deadline. The pound was 0.1% lower at $1.2877, not far from a late July low of $1.2768 hit last week. Immediate resistance can be seen at 1.3013 (50%fib), an upside break can trigger rise towards 1.3027 (11DMA).On the downside, immediate support is seen at 1.2940 (55DMA), a break below could take the pair towards 1.2893 (38.2%fib).

USD/CHF: The dollar edged lower against the Swiss franc on Wednesday as investors showed little appetite for big bets as they awaited the Federal Reserve’s view on the economy at its policy meeting. Following robust industrial output and retail sales data from China and higher U.S. factory production investors are focusing on the Fed’s policy statement due Wednesday, the first since Chair Jerome Powell announced an increased tolerance for higher inflation. The Fed is due to make its statement at 1800 GMT Wednesday, followed by a news conference from Powell. Immediate resistance can be seen at 0.9083(5 DMA), an upside break can trigger rise towards 0.9120 (21DMA).On the downside, immediate support is seen at 0.9052(Sep 16th low), a break below could take the pair towards 0.9000 (Psychological level ).

USD/JPY: The Japanese yen strengthened against dollar on Wednesday as traders bet an ultra-accommodative U.S. Federal Reserve would weigh on the U.S. dollar. The Fed is due to make its first policy statement since adopting a more tolerant approach to inflation later on Wednesday. Traders bought yen on the belief the U.S. central bank may promise further stimulus, which would likely weaken the U.S. dollar and push Treasury yields lower. The Fed is not expected to move on rates but adjustments to bond purchases are possible. Strong resistance can be seen at 105.19 (38.2%fib), an upside break can trigger rise towards 106.65 (5 DMA).On the downside, immediate support is seen at 104.77 (Daily low ), a break below could take the pair towards 104.00(Psychological level).

Equities Recap

A fourth day of gains in retail stocks nudged European equities higher on Wednesday as Zara-owner Inditex posted a quarterly profit, although UK blue-chip stocks came under pressure after a surge in the previous session.

At (GMT 13:10 ),UK's benchmark FTSE 100 was last trading down at 0.39 percent, Germany's Dax was up by 0.05 percent, France’s CAC   was last down by 0.31 percent.

Commodities Recap

Gold prices rose on Wednesday, helped by a subdued dollar as investors bet on dovish monetary cues from the U.S Federal Reserve when it announces its policy decision later today.

Spot gold was up 0.4% to $1,963.97 per ounce by 1131 GMT, while U.S. gold futures rose 0.4% to $1,973.50 per ounce.

Oil rose for a second day on Wednesday, gaining more than 2%, as a hurricane closed U.S. offshore production and an industry report showed U.S. crude inventories unexpectedly decreased.

Brent crude rose 85 cents, or 2.1%, to $41.38 a barrel by 1215 GMT, while U.S. crude added 88 cents, or 2.3%, to $39.16. Both contracts rose by more than 2% on Tuesday.

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