Market Roundup
•German Jul HICP (YoY) 8.5%, 8.5% forecast, 8.2% previous
•German Jul HICP (MoM) 0.8%, 0.8% forecast, -0.1% previous
•German Jul CPI (MoM) 0.9%, 0.9% forecast, 0.1% previous
•Italian Jul HICP (YoY) 8.4%,8.4% forecast, 8.5% previous
•Italian Jul CPI (MoM) 0.4%, 0.4% forecast, 1.2% previous
•Italian Jul CPI (YoY) 7.9%, 7.9% forecast, 8.0% previous
•Greek Jun Industrial Production (YoY) 8.4%,3.2% previous
Looking Ahead – Economic data (GMT)
•12:30 US Jul Real Earnings (MoM) -1.0% previous
•12:30 US Jul CPI Index, s.a 295.33 previous
•12:30 US Jul CPI (MoM) 0.2% forecast, 1.3% previous
•12:30 US Jul Core CPI (YoY) 6.1% forecast, 5.9% previous
•12:30 US Jul CPI (YoY) 8.7% forecast, 9.1% previous
•12:30 US Jul CPI Index, n.s.a. 296.67 forecast, 296.31 previous
•12:30 US Jul Core CPI (MoM) 0.5% forecast, 0.7% previous
•14:00 US Jun Wholesale Trade Sales (MoM) 0.9% forecast, 0.5% previous
•14:00 US Wholesale Inventories (MoM) 1.9% forecast, 1.8% previous
•14:30 US Gasoline Inventories -0.633M forecast, 0.163M previous
•14:30 US Crude Oil Inventories 0.073M forecast, 4.467M previous
•15:00 US Jul Cleveland CPI (MoM) 0.7% previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Fxbeat
EUR/USD: The euro edged higher on Wednesday as dollar dipped ahead of U.S. inflation data which markets will scrutinise for guidance on how steeply the U.S. Federal Reserve will raise interest rates.The figures were due at 1230 GMT. Economists expect year-on-year headline inflation to be running at a scorching 8.7%, a small retreat from June's 9.1%. Core inflation is expected at 0.5% month-on-month. A strong U.S. inflation print would damage the case that the Fed will pivot away from its focus on curtailing inflation with interest rate hikes and instead worry more about a recession, and so potentially raise rates more slowly. The euro climbed 0.28% to $1.02425. Immediate resistance can be seen at 1.0277(38.2%fib), an upside break can trigger rise towards 1.0338(50DMA).On the downside, immediate support is seen at 1.0197(14DMA), a break below could take the pair towards 1.0135(23.6%fib).
GBP/USD: Sterling strengthened on Wednesday as dollar edged down ahead of key U.S. inflation data. Economists polled by Reuters expect U.S. annual inflation to have eased to 8.7% last month from 9.1% in June. Core inflation is expected at 0.5% month-on-month . The data are due at 1230 GMT.The Fed hiked rates by 75 basis points in both June and July to rein in soaring inflation.Fed funds futures traders are now pricing for a 69.5% chance of another 75 basis point rate increase at the U.S. central bank's next policy meeting in September . Immediate resistance can be seen at 1.2112(38.2%fib), an upside break can trigger rise towards 1.2150(50DMA).On the downside, immediate support is seen at 1.2055(21DMA),a break below could take the pair towards 1.2022 (38.2%fib).
USD/CHF: The dollar dipped against the Swiss franc on Wednesday ahead of U.S. inflation data that could give clues to the Federal Reserve's appetite for more aggressive rate rises. The Consumer Price Index (CPI) report will be released at 1230 GMT, with markets watching for signs that inflation eased in July despite unexpectedly strong U.S. jobs numbers last week.The market is pricing in a 69.5% chance of a 75 basis point rate increase at the Fed's next meeting. Economists polled by Reuters expect the CPI to show year-on-year headline inflation of 8.7%, far above the Fed's target of 2% but down from last month's red-hot 9.1%. Immediate resistance can be seen at 0.9554(11DMA), an upside break can trigger rise towards 0.9575(38.2%fib).On the downside, immediate support is seen at 0.9451 (23.6%fib), a break below could take the pair towards 0.9432 (Lower BB).
USD/JPY: The dollar was little changed against yen on Wednesday as investors waited for a key U.S. report on inflation to provide hints to the Federal Reserve’s plans for future monetary tightening.The Consumer Price Index (CPI) report will be released later today, with markets watching for signs that inflation eased in July despite last week’s unexpectedly strong U.S. jobs numbers .Economists polled expect the CPI to show year-on-year headline inflation of 8.7%, far above the Fed's target of 2% but down from last month's red-hot 9.1%.. Strong resistance can be seen at 135.78(23.6%fib), an upside break can trigger rise towards 136.00(Psychological level).On the downside, immediate support is seen at 134.59(5DMA), a break below could take the pair towards 133.96 (38.2%fib).
EquitiesRecap
European shares edged lower on Wednesday on losses in technology stocks ahead of key inflation data from the United States, while gains in supermarket major Ahold Delhaize kept declines in check.
At (GMT 12:01),UK's benchmark FTSE 100 was last trading up at 0.06% percent, Germany's Dax was up by 0.37% percent, France’s CAC was down by 0.01% %percent.
Commodities Recap
Gold prices were little changed on Wednesday as caution set in ahead of key U.S. inflation data that could influence the pace of Federal Reserve interest rate hikes.
Spot gold was flat at $1,793.78 per ounce by 1032 GMT, after hitting its highest since July 5 at $1,800.29 on Tuesday. U.S. gold futures eased 0.1% to $1,809.90.
Oil prices fell on Wednesday on expectations that Druzhba pipeline flows will resume shortly and demand concerns ahead of publication of key demand indicators.
Brent crude futures were down $1.69, or 1.75%, to $94.62 a barrel at 1124 GMT.U.S. West Texas Intermediate crude futures were down $1.61 cents, or 1.78%, at $88.89.
