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Europe Roundup: Euro gains after German inflation data, European stocks retreat, Gold gains, Oil firms near $70 a barrel on improving demand outlook-May 31st,2021

Market Roundup

•EU Apr M3 Money Supply (YoY)  9.2%,9.5% forecast,10.1%previous

•EU Private Sector Loans (YoY) 3.8%,3.3% previous

• Italian May CPI (YoY)  1.3%, 1.0% forecast, 1.1% previous

•Italian May HICP (YoY)  1.3%, 1.3% forecast, 1.0% previous

•Italian May HICP (MoM)  0.0%,0.1% forecast, 0.9% previous     

•Italian May CPI (MoM)  0.0%,0.4% forecast, 0.4% previous        

•Belgian GDP (QoQ) (Q1) 1.0%,0.6% previous

•Portuguese GDP (YoY) (Q1) -5.4%,-5.4% previous         

•German May HICP (MoM) 0.3%,  0.3% forecast, 0.5% previous

•German May HICP (YoY)  2.4%, 2.5% forecast, 2.1% previous

•German May CPI (MoM)  0.5%,0.3% , forecast  0.7% previous

•Canada Apr RMPI (YoY)  56.4%                ,34.7% previous

•Canada Apr RMPI (MoM) 1.0%, 2.3% previous

•Brazil Apr Budget Balance  30.000B,-44.528B previous

•Canada Apr IPPI (YoY)  14.3%,10.0% previous

•Brazil Apr Budget Surplus 24.300B,  16.750B forecast, 4.981B previous

•Brazil Apr Debt-to-GDP ratio 60.5%,  61.3% previous

•Canada Current Account (Q1) 1.2B, -8.3B forecast, -7.3B previous

Looking Ahead - Economic Data (GMT)

•13:00  French 12-Month BTF Auction -0.632% previous

•13:00  French 3-Month BTF Auction -0.635% previous

Looking Ahead - Economic events and other releases (GMT)

•No significant events


EUR/USD: The euro edged higher against dollar on Monday after Germany’s inflation data ,but gains were limited ahead of broader euro zone data on Tuesday. German inflation in May rose 2.5% year-on-year, the highest since 2011, data showed on Monday, accelerating further above the ECB’s “close to but below 2%” target and above expectations. Trading is was lite with traders in the United Kingdom and United States on public holiday. Focus this week is on the European Union, which is expected soon to reveal details about the funding plan for its coronavirus recovery fund after all member states backed the ratification of a law that will allow the EU to start borrowing on the market. Immediate resistance can be seen at 1.2242 (23.6% fib), an upside break can trigger rise towards 1.2283 (Higher BB).On the downside, immediate support is seen at 1.2183 (38.2% fib), a break below could take the pair towards 1.2135(50%fib).

GBP/USD: Sterling was little changed against dollar on Monday as slew of European and U.S. data this week that will provide a clearer picture on the global economy’s recovery path. The main event of the week will be U.S. payrolls on Friday with median forecasts at 650,000 but the outcome is uncertain following April’s shockingly weak 266,000 gain. Although U.S. inflation data last week was above estimates, another big miss on the jobs front would heap pressure on the Fed to postpone plans to wind down its stimulus. Immediate resistance can be seen at 1.4221 (23.6%fib),an upside break can trigger rise towards 1.4283 (Higher BB).On the downside, immediate support is seen at 1.4162 (5DMA), a break below could take the pair towards 1.4089(38.2%fib).

USD/CHF: The dollar was little changed against the Swiss franc on Monday as the greenback failed to maintain a rally made on Friday after a key measure of U.S. inflation showed stronger price gains than expected. The U.S. inflation data released on Friday briefly drove the greenback higher against other currencies, but it ran out of steam ahead of a long weekend in New York and London.For now, the data has had limited impact on investors' expectations that the Federal Reserve will keep the current pace of asset purchases for many months before tapering. Immediate resistance can be seen at 0.9030 (38.2%fib), an upside break can trigger rise towards 0.9101 (50%fib).On the downside, immediate support is seen at 0.8975 (5DMA), a break below could take the pair towards 0.8942 (23.6%fib).

USD/JPY: The dollar came under pressure against yen on Monday, as traders assessed the impact of a surge in U.S. inflation before monthly jobs data later this week. In holiday-thinned trade, investors weighed the impact on U.S. assets of rising price pressures and a dovish Fed. Despite rising inflation, markets don't expect a rate hike well into the back end of 2022.The core PCE price index vaulted 3.1% on Friday, the largest annual gain since July 1992, due to a recovery from the pandemic and various supply disruptions. Strong resistance can be seen at 109.91 (Higher BB), an upside break can trigger rise towards 110.26 (23.6%fib).On the downside, immediate support is seen at 109.66 (38.2%fib), a break below could take the pair towards 109.18(50%fib).

Equities Recap

European stocks slipped from record highs on Monday in subdued trading due to holidays in major markets, but optimism over a swift economic recovery put the benchmark index on course for its fourth month of gains.

At (GMT 12:30 ),UK's benchmark FTSE 100 was last trading up at 0.04 percent, Germany's Dax was down by 0.32 percent, France’s CAC finished was down by 0.13 percent.

Commodities Recap

Gold firmed on Monday and was on course for its biggest monthly jump since July 2020 as the U.S. dollar headed for a second month of decline, while growing inflationary pressures also lifted bullion’s appeal.

Spot gold was up 0.1% at $1,904.34 per ounce by 0848 GMT, while U.S. gold futures rose 0.2% to $1,909.00. Spot prices have climbed nearly 7.7% so far this month.

Oil prices firmed on Monday, with Brent trading near $70 a barrel, underpinned by the bright outlook for fuel demand growth in the next quarter, while investors looked ahead to the OPEC+ meeting this week to see how producers will respond.

Brent crude futures rose 69 cents, or 1%, to $69.41 a barrel by 0955 GMT, after reaching a session high of $69.82. U.S. West Texas Intermediate crude was at $67 a barrel, up 68 cents, or 1%.

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