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Europe Roundup: Euro holds near five-year low ahead of ECB's Lagarde speech, European shares gain, Gold falls to 2-1/2-month trough, Oil slips on China demand worries, while EU weighs Russia oil ban-May 3rd,2022

Market Roundup

•German Apr Unemployment Rate 5.0%, 5.0% forecast, 5.0% previous

•German Apr Unemployment n.s.a 2.309M, 2.327M forecast,  2.362M previous

•German Apr Unemployment Change  -13K,-15K forecast, -18K previous

•Greek Apr Manufacturing PMI  54.8, 54.6 previous

•UK Apr Manufacturing PMI  55.8, 55.3 forecast, 55.3 previous

•EU Mar PPI (MoM) 5.3%,5.0% forecast, 1.1% previous

•EU Mar PPI (YoY) 36.8%,36.3% forecast, 31.4% previous

•EU Mar Unemployment Rate 6.8%,6.7% forecast, 6.8% previous

Looking Ahead - Economic Data (GMT) 

•12:55 US Redbook (YoY) 12.7% previous

•13:00 Canada ADP Nonfarm Employment Change 475.0K previous

•14:00 US Mar Factory orders ex transportation (MoM) 0.4% previous

•14:00 US Mar Durables Excluding Defense (MoM)  1.2% previous

•14:00 US Mar JOLTs Job Openings 11.000M forecast, 11.266M previous

•14:00 US Mar Factory Orders (MoM)  1.1% forecast,-0.5% previous

•15:00 New Zealand GlobalDairyTrade Price Index -3.6% previous

Looking Ahead - Economic events and other releases (GMT)

•16:30 Bank of Canada Senior Deputy Governor Rogers Speech                

•13:00 ECB President Lagarde Speaks    


EUR/USD: The euro was flat on Tuesday, holding close to a five-year low against the U.S. dollar ahead of a speech from European Central Bank President Christine Lagarde. Luis de Guindos, ECB Vice-President said in an interview published over the weekend by the central bank that its Governing Council hadn’t discussed “any predetermined path for rate rises”. He added that much will depend on macroeconomic data in June. Data showed German unemployment had fallen in April, though the war in Ukraine is slowing the continued recovery that has been seen with the lifting of pandemic measures. The euro was flat at $1.05075 at 0855 GMT. It had dropped to $1.0470 on Thursday, its lowest since January 2017. Immediate resistance can be seen at 1.0526 (5DMA), an upside break can trigger rise towards 1.0595 (38.2%fib).On the downside, immediate support is seen at 1.0490(23.6%fib), a break below could take the pair towards 1.0400 (Psychological level).

GBP/USD: The British pound rose on Tuesday, moving away from 21-month lows against the dollar as traders took profits on the recent surge in the U.S. currency ahead of both Federal Reserve and Bank of England monetary policy meetings this week. The Bank of England meeting, which is expected to result in a 0.25-percentage-point rise in interest rates on Thursday, is the big event of the week for sterling. In recent weeks the pound has fallen sharply as investors have piled into dollars in expectation that the Federal Reserve will raise rates faster than other central banks and that the U.S. economy will hold up better than others in the face of soaring inflation and slowing economic grow. Immediate resistance can be seen at 1.2535(38.2%fib), an upside break can trigger rise towards 1.2637(50%fib).On the downside, immediate support is seen at 1.2476(Daily low), a break below could take the pair towards 1.2418(23.6%fib).

USD/CHF: The dollar edge lower against Swiss franc on Tuesday as investors braced for a large interest rate hike by the U.S. Federal Reserve.  The U.S. central bank’s Federal Open Market Committee will begin its meeting on interest rates later in the day and is expected to hike borrowing costs by half-a-percentage point when it announces its decision on Wednesday.The Fed raised its policy interest rate by 25 basis points in March, and is soon likely to start trimming its asset holdings, as it attempts to tighten pandemic-era monetary policy and rein in soaring inflation. Immediate resistance can be seen at  0.9800 (23.6 % fib), an upside break can trigger rise towards 0.9834(Higher BB).On the downside, immediate support is seen at 0.9744(5DMA), a break below could take the pair towards 0.9706(38.2 % fib ).

USD/JPY: The dollar edged slightly lower  against dollar on Tuesday as COVID-19 restrictions in China   triggered concerns about global growth increasing demand for Japanese yen. The Japanese yen held just above 20-year lows against the dollar reached on Thursday, when the Bank of Japan strengthened its commitment to keep interest rates ultra-low by vowing to buy unlimited amounts of bonds daily to defend its yield target.The Japanese currency was last at 130.10, after reaching 131.24 on Thursday, the weakest since April 2002. Strong resistance can be seen at 130.52(23.6%fib), an upside break can trigger rise towards 131.53(Higher BB).On the downside, immediate support is seen at 129.58 (5DMA), a break below could take the pair towards 128.44(38.2%fib).

Equities Recap

European stocks rose on Tuesday after a string of upbeat earnings, while banking shares gained as government bond yields hit fresh highs in anticipation of quicker interest rate hikes by global central banks to tackle surging inflation.

At (GMT 10:45 ),UK's benchmark FTSE 100 was last trading down  at 0.71 percent, Germany's Dax up  by 0.25 percent, France’s CAC finished was up by 0.50 percent.

Commodities Recap

Gold prices fell on Tuesday to their lowest level since mid-February as investors braced for more aggressive rate hikes from the U.S. central bank that have boosted the dollar and Treasury yields and lifted the opportunity cost of holding gold.

Spot gold fell 0.3% to $1,857.48 per ounce by 0942 GMT. Prices fell to $1,849.90, the lowest level since Feb. 16, earlier in the session.

Oil slipped about 1% on Tuesday as concerns about the demand outlook due to prolonged COVID lockdowns in China outweighed support from a possible European oil embargo on Russia over its actions in Ukraine.

Brent crude was down $1.30, or 1.2%, at $106.28 a barrel at 0942 GMT. U.S. West Texas Intermediate (WTI) crude dropped 90 cents, or 0.9%, to $104.27.

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