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Europe Roundup: Euro's advance slows as risk sentiment falters, European shares slip,Gold retreats more than 1%, Oil prices slide as virus surge weighs on demand outlook-July 30th,2020

Market Roundup

• Spanish CPI (YoY) -0.6%,-0.3% forecast, -0.3% previous

• Spanish HICP (YoY)  -0.7%,-0.2% forecast, -0.3% previous

• German July Unemployment n.s.a.  2.910M, 2.853M previous

• German July Unemployment  2.923M, 2.943M  previous

• German July Unemployment Change  -18K, 43K forecast, 69K previous              

• German July Unemployment Rate  6.4%, 6.5% forecast, 6.4% previous              

• German GDP (QoQ) (Q2) -10.1%,-9.0% forecast, -2.2% previous            

• German GDP (YoY) (Q2) -11.7%,-10.9% forecast, -1.9% previous           

• EU June Unemployment Rate  7.8%,7.7% forecast, 7.4% previous

• EU Consumer Confidence  -15.0, -15.0 forecast, -14.7 previous

• EU Jul Services Sentiment  -26.1, -25.0 forecast, -35.6 previous

• EU Jul Business Climate  -1.80, -2.26 previous

• EU Jul Business and Consumer Survey  82.3, 81.0 forecast, 75.7 previous

• EU Jul Industrial Sentiment  -16.2, -17.0 forecast, -21.7 previous

• Belgium Jul  CPI (MoM)  0.22%               , 0.06% previous

• Belgium Jul  CPI (YoY)  0.73%, 0.60% previous

• German Jul HICP (MoM)  -0.2% forecast, 0.7% previous

• German Jul CPI (YoY)  0.2% forecast, 0.9% previous

• German Jul   CPI (MoM)  -0.2% forecast, 0.6% previous

• German Jul HICP (YoY)   0.4% forecast, 0.8% previous

• US Jobless Claims 4-Week Avg 1,368.50K ,1,360.25K previous

• US Continuing Jobless Claims 17,018K, 16,200K forecast, 16,197K previous

• US Initial Jobless Claims 1,434K,1,450K forecast, 1,416K previous

• US GDP Price Index (QoQ) (Q2) -2.1%,1.1% forecast, 1.6% previous

• US Core PCE Prices (Q2) -1.10%,1.00% forecast, 1.70% previous

• US GDP (QoQ) (Q2)  -32.9%, -34.1% forecast, -5.0% previous

Looking Ahead - Economic Data (GMT)

•13:00 Belgian GDP (QoQ) (Q2)  -12.0% forecast, -3.6% previous

•13:00 Russia Central Bank Reserves (USD)  574.0B previous

Looking Ahead - Economic events and other releases (GMT)

•No significant events

Fx Beat 

EUR/USD: The euro retreated on Thursday after a two-month rally against the dollar, as Germany reported disappointing economic output for the second quarter and the Federal Reserve maintained its support for the U.S. economy. The euro was set to end July with its best monthly gain in a decade, a 4.7% jump, but a shift in the bullish mood is threatening the milestone.The euro lost about 0.34% to $1.1752 as the continent's stock markets fell after disappointing second-quarter earnings weighed on morale. Immediate resistance can be seen at 1.1779 (Daily high), an upside break can trigger rise towards 1.1828 (23.6% fib).On the downside, immediate support is seen at 1.1732 (5 DMA), a break below could take the pair towards 1.1700 (38.2% fib).

GBP/USD: Sterling hovered around $1.30 against dollar as Brexit-related risks and the economic fallout from the coronavirus pandemic kept investors cautious on the currency’s longer-term outlook. Investors are generally bearish on the pound as the UK and European Union have made little progress on post-Brexit trade arrangements. Britain left the EU in January and its transition period ends on December 31.The outlook for the UK is also hampered by Britain’s high COVID-19 death toll. Immediate resistance can be seen at 1.3002 (23.6% fib), an upside break can trigger rise towards 1.3125 (10 March high).On the downside, immediate support is seen at 1.2931 (5 DMA), a break below could take the pair towards 1.2823 (9 DMA).

USD/CHF: The dollar edged higher against the Swiss franc on Thursday as the Federal Reserve’s pledge to use all its tools to support the U.S. economy failed to reassure investors uneasy about a stalemate on fiscal support and rising coronavirus cases. On Wednesday, all Fed members voted as expected to leave the target range for short-term interest rates between 0% and 0.25%, where it has been since March 15, when the virus was beginning to hit the nation. The unchanged policy setting together with a pledge the Fed would use its “full range of tools” if needed boosted risk appetite overnight.  Immediate resistance can be seen at 0.9153 (23.6% fib), an upside break can trigger rise towards 0.9173 (5 DMA).On the downside, immediate support is seen at 0.9114 (Daily low), a break below could take the pair towards 0.9081 (Lower BB).

USD/JPY: The dollar strengthened against the Japanese yen on Thursday as investors judged a steady message from the U.S. Federal Reserve on stimulus. The Fed on Wednesday left interest rates near zero and pledged to keep policy accommodative for as long as needed to support the economy, but said data was pointing to a slowing in the pace of recovery. Strong resistance can be seen at 105.35 (5 DMA), an upside break can trigger rise towards 105.83 (38.2% fib).On the downside, immediate support is seen at 104.77 (Daily low), a break below could take the pair towards 104.40 (23.6% fib).

Equities Recap

European shares fell on Thursday as dismal earnings reports and weaker-than-expected German GDP data took the shine off the U.S. Federal Reserve’s vow to keep stimulus taps open to shore up a coronavirus-ravaged economy.

At (GMT 12:30 ),UK's benchmark FTSE 100 was last trading lower at 1.76 percent, Germany's Dax was down 2.58 percent, France’s CAC was last up by 1.34 percent.

Commodities Recap

Gold fell on Thursday as the dollar stalled its slide, with analysts saying bullion may face more resistance in its bid to breach the $2,000 level.

Spot gold was 1.0% lower at $1,951.42 per ounce by 1220 GMT, having earlier fallen as much as 1.3% to $1,944.76.

Oil prices fell on Thursday, as surging coronavirus infections around the world threatened to jeopardise a recovery in fuel demand just as major oil producers are set to raise output.

The most-active Brent crude contract for October fell 58 cents, or 1.3%, to $43.51 a barrel at 1224 GMT. The September Brent contract, which is expiring on Friday, fell 57 cents to $43.18 a barrel.U.S. West Texas Intermediate (WTI) crude futures were down 70 cents, or 1.7%, at $40.57 a barrel.

Treasuries Recap

German government bond yields edged down towards two-month lows on Thursday as investor attention turned to inflation and GDP readings in Europe after the Fed left its policy unchanged.

Germany’s 10-year yield was down 1 basis point to -0.51% in early trade, nearing two-month lows at -0.52% hit on Wednesday.Italian 10-year yields were unchanged at 1.06%.

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