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Europe Roundup: Euro eases as dollar ticks higher, European shares dip, Gold eases, Oil steadies as U.S. inventory fall tempers demand woes-January 13th,2021

Market Roundup

•U.S. Fed's Beige Book due at 1900 GMT

• Fed officials expect U.S. economy rebound on vaccinations

•German Dec WPI (YoY)  -1.2%, -1.7% previous

•German Dec WPI (MoM)  0.6%, 0.1% previous

•Russian Jan Forex Intervention  106.3B, -15.0B forecast, -50.8B previous

•Italian Nov Industrial Production (YoY)  -4.2%,-4.3% forecast, -2.1% previous

•Italian Nov Industrial Production (MoM)  -1.4%, -0.4% forecast, 1.3% previous

•EU Industrial Production (YoY)  -0.6%,-3.3% forecast, -3.8% previous

•EU Nov Industrial Industrial Production (MoM)  2.5%, 0.2% forecast, 2.1% previous

Looking Ahead – Economic Data (GMT)

•13:30 US Dec CPI Index, s.a  260.82 previous

•13:30 US Dec Real Earnings (MoM)  0.1% previous

•13:30 US Dec CPI, n.s.a (MoM)  -0.06% previous

•13:30 US Dec Core CPI Index  269.89 previous

•13:30 US Dec CPI Index, n.s.a.  260.43 forecast, 260.23 previous

•13:30 US Dec Core CPI (MoM)  0.1% forecast, 0.2% previous

•13:30 US Dec CPI (YoY)  1.3% forecast, 1.2% previous

•13:30 US Dec CPI (MoM)   0.4% forecast,0.2% previous

•13:30 US Dec Core CPI (YoY)  1.6% forecast, 1.6% previous

•15:30 US Crude Oil Inventories- 2.266M forecast, -8.010M previous

•16:00 US Dec Cleveland CPI (MoM)  0.1% previous

Looking Ahead - Economic events and other releases (GMT)

• 18:00 US FOMC Member Brainard Speaks

• 19:00 US FOMC Member Harker Speaks

• 20:00 US FOMC Member Clarida Speaks

Fx Beat 

EUR/USD: The euro declined against dollar on Wednesday as investors remained bearish on the currency’s near-term prospects. The euro, having earlier made its sharpest daily gain against the greenback, lost ground to trade 0.3% lower on the day at $1.2168. December U.S. inflation figures are also due at 1330 GMT, with expectations for annual core CPI to hold steady at 1.6%.Later on Wednesday Reserve Bank of St. Louis President James Bullard is due to participate in a discussion on monetary policy at a Reuters Next Virtual Forum at 1430 GMT. Immediate resistance can be seen at 1.2219 (38.2%fib), an upside break can trigger rise towards 1.2328 (23.6%fib).On the downside, immediate support is seen at 1.2117 (38.2%fib), a break below could take the pair towards 1.2028 (61.8%fib).

GBP/USD: Sterling strengthened against dollar on Wednesday as optimism over the pace of Britain’s vaccination rollout also offered support. Following the completion of a Brexit trade deal in December, investors have turned their attention to Britain’s economy and its COVID-19 vaccination campaign. Britain is in a race against time to roll out the inoculation programme, Prime Minister Boris Johnson said, as deaths hit record highs and hospitals ran out of oxygen, and his top medical adviser warned the pandemic’s worst weeks were near. Immediate resistance can be seen at 1.3700 (Psychological level), an upside break can trigger rise towards 1.3759 (Higher BB).On the downside, immediate support is seen at 1.3617 (38.2%fib), a break below could take the pair towards 1.3557 (50%fib).

USD/CHF: The dollar strengthened against the Swiss franc on Wednesday as stabilising U.S. Treasury yields helped the dollar trade back in positive territory. Benchmark 10-year Treasury yields fell more than 6 basis points from a 10-month high hit on Tuesday, briefly snuffing out a three-day winning streak for the dollar. They last traded 2 basis points lower at 1.12%, helping the currency trade 0.1% higher against its peers. At 12:30 GMT, the dollar was 0.27 percent higher versus the Swiss franc at 0.8884 . Immediate resistance can be seen at 0.8868 (50%fib), an upside break can trigger rise towards 0.8892 (38.2%fib).On the downside, immediate support is seen at 0.8848 (61.8% fib), a break below could take the pair towards 0.8800(Psychological level).

USD/JPY: The dollar edged higher against the Japanese yen on Wednesday as expectations that a vaccine will eventually win the battle against the coronavirus fuelled recovery hopes supported dollar. Investors are betting that the incoming Biden administration would ramp up U.S. distribution of coronavirus vaccines and spend big on more stimulus, which will contribute to a global economic recovery and increased demand for commodities. At (GMT 12:30), the yen was last down 0.15 % at 103.91. Strong resistance can be seen at 103.76 (50%fib), an upside break can trigger rise towards 104.05 (38.2%fib).On the downside, immediate support is seen at 103.48(61.8%fib), a break below could take the pair towards 103.00 (Psychological level).

Equities Recap

European stocks were little changed on Wednesday as a profit warning from Danish wind farm developer Orsted hit utilities, while French grocer Carrefour jumped following merger talks.

At (GMT 12:30 ),UK's benchmark FTSE 100 was last trading down at 0.21% percent, Germany's Dax was down  by 0.24 percent, France’s CAC finished was down by 0.04percent.

Commodities Recap

Gold prices eased on Wednesday, reversing earlier gains, as the dollar firmed and U.S. yields held close to recent highs, with investors awaiting for more details on American fiscal stimulus measures.

Spot gold was down 0.1% at $1,853.80 per ounce by 1107 GMT, while U.S. gold futures        were up 0.6% at $1,854.30.

Oil prices steadied after an early jump on Wednesday as industry data showing a bigger-than-expected drop in U.S. crude inventories, but rising global COVID-19 infections capped price gains.

Brent crude prices were down 4 cents at $56.54 a barrel by 1032 GMT. Prices rose to a session high of $57.42 a barrel earlier in the session, the highest since Feb. 24.

U.S. West Texas Intermediate (WTI) was up 3 cents at $53.24, after hitting a session high of $53.93, its highest since Feb. 20.

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