Europe Roundup: Euro gains against dollar ahead of Federal Reserve Chairman Jerome Powell’s speech, European shares slide, Gold steady, Oil holds near $30, caught between demand loss and supply cuts-May 13th,2020

Market Roundup

• Powell's speech on current economic issues at 1300 GMT

• UK March Trade Balance Non-EU  -4.88B, -4.00B forecast, -5.57B previous  
 
• UK GDP (QoQ) (Q1) -2.0%,-2.5% forecast, 0.0% previous    

• UK GDP (MoM) -5.8%,-0.1% previous  
 
• UK Index of Services -1.9%,0.2% previous    
• UK Monthly GDP 3M/3M Change -2.0%,0.1% previous    

• UK March Trade Balance  -12.51B, -10.00B forecast, -11.49B previous  
 
• UK March Industrial Production (YoY)  -8.2%, -9.3% forecast, -2.8% previous    

• UK Business Investment (QoQ) (Q1) 0.0%,-2.5% forecast, -0.5% previous

• UK GDP (YoY) (Q1) -1.6%,-2.1% forecast 1.1% previous

• UK March Industrial Production (MoM)  -4.2%, -5.6% forecast, 0.1% previous

• UK March Manufacturing Production (MoM)  -4.6%,-6.0% forecast, 0.5% previous    

• UK March Manufacturing Production (YoY)  -9.7%,-10.4% forecast, -3.9% previous

• EU Industrial March Production (MoM)  -11.3%,-12.1% forecast, -0.1% previous

• EU Industrial March Production (YoY)  -12.9%, -12.4% forecast, -1.9% previous

• Portuguese  April CPI (YoY)  -0.2%,0.1% forecast, 0.0% previous

• Portuguese April CPI (MoM)  0.3%,0.6% forecast, 1.4% previous

Looking Ahead Economic Data

• 12:30 US April PPI (YoY) -0.2% forecast, 0.7% previous

•12:30 US April PPI (MoM) -0.5% forecast, -0.2% previous

• 12:30 US April Core PPI (MoM) 0.0% forecast, 0.2% previous

• 12:30 US April Core PPI (YoY) 0.9% forecast, 1.4% previous

• 14:00 UK NIESR GDP Estimate -4.8% previous

• 14:30 US Crude Oil Inventories 4.147M forecast, 4.590M previous

Looking Ahead - Events, Other Releases (GMT)

• 13:00 US Fed Chair Powell Speaks

• 15:00 ECB's De Guindos Speaks

Fxbeat

EUR/USD: The euro strengthened on Wednesday as dollar dipped as ahead a speech from Federal Reserve Chairman Jerome Powell after U.S. President Donald Trump called for the introduction of negative interest rates. Trump on Tuesday called for his country to “accept the gift” of negative rates - as data showed that U.S. consumer prices dropped 0.8% in April, the largest decline since December 2008 when the economy was in the throes of a recession, fuelling the debate over the policy response. Immediate resistance can be seen at 1.0890 (50% fib), an upside break can trigger rise towards 1.0951 (61.8% fib).On the downside, immediate support is seen at 1.0821 (38.2% fib), a break below could take the pair towards 1.0800 (Psychological level).

GBP/USD: Sterling rose against dollar on Wednesday as UK government support to shield the economy from COVID-19 pandemic boosted sterling.Britain on Tuesday extended its job retention scheme, in which the government pays 80% of furloughed workers’ wages, by another four months until the end of October. Sterling was last trading up 0.65% at $1.2325 and 88.29 pence versus the euro. Immediate resistance can be seen at 1.2273 (23.6% fib), an upside break can trigger rise towards 1.2375 (9 DMA).On the downside, immediate support is seen at 1.2238 (Lower BB), a break below could take the pair towards 1.2200 (Psychological level).

USD/CHF: The dollar declined against the Swiss franc on Wednesday ahead speech by Federal Reserve Chairman Jerome Powell. Investors are speculating that, the United States could introduce negative interest rates. Powell will be speaking on current economic issues in a webcast hosted by the Peterson Institute for International Economics at 9 a.m. (1300 GMT).Until now, Fed officials have said they do not see a need to cut interest rates below zero. Immediate resistance can be seen at 0.9750 (12 May high), an upside break can trigger rise towards 0.9922 (Higher BB).On the downside, immediate support is seen at 0.9653  (50 DMA), a break below could take the pair towards 0.9625 (Lower BB).

USD/JPY: The dollar edged lower against the Japanese yen Wednesday as fears about a second wave of coronavirus infections increased demand for safe haven yen. Investors, many facing steep losses due to the pandemic-driven shakeout in assets over the past few months, have also had to contend with renewed U.S.-China trade tensions. The mood was further soured by proposed legislation by a leading U.S. Republican senator that would authorize President Donald Trump to impose sanctions on China if it fails to give a full account of events leading to the coronavirus outbreak. Strong resistance can be seen at 107.55 (50 DMA), an upside break can trigger rise towards 108.10 (Higher BB).On the downside, immediate support is seen at 106.90 (5 DMA), a break below could take the pair towards 106.10 (Lower BB). 

Equities Recap

 European shares fell on Wednesday, as investors feared a surge in COVID-19 cases after several hard-hit countries started to ease lockdowns, while rising U.S.-China tensions also dented sentiment.

At (GMT 12:15 ),UK's benchmark FTSE 100 was last trading down at 0.76 percent, Germany's Dax was down by 1.34 percent, France’s CAC finished was down by 1.53 percent.

Commodities Recap

Gold prices were little changed on Wednesday, with markets awaiting a speech by Federal Reserve Chairman Jerome Powell for more signals on the U.S. interest rate trajectory after dismal economic data.

Spot gold  was steady at $1,701.43 per ounce by 0921 GMT. U.S. gold futures edged 0.1% lower to $1,705.80.

Oil prices edged higher on Wednesday, reversing earlier losses, and Brent held near $30 a barrel as potential OPEC+ plans to deepen supply cuts were tempered by demand concerns exacerbated by a possible second wave of coronavirus infections as countries ease lockdowns.

Brent crude climbed 17 cents, or 0.57%, to $30.15 a barrel by 1138 GMT, after hitting a low of $28.92 a barrel earlier.

West Texas Intermediate crude futures rose 13 cents, or 0.5%, to $25.91 after falling to $25.07 a barrel.