Europe Roundup: Sterling dips against dollar after Bank of England emergency rate cut,Gold rises, Oil falls 3% as Saudi, UAE plan for higher output capacity-March 11th,2020

Market Roundup

• Italian Jan PPI (YoY) -2.3%,4.1% previous
• Italian Jan PPI (MoM) -0.2%,-0.5% previous

• UK Jan Construction Output (MoM) -0.8%,0.2% forecast, 0.4% previous

• U.K. Jan Construction Output (YoY) 1.6%,2.4% forecast, 5.0% previous

• U.K GDP (MoM) 0.0% , 0.2% forecast, 0.3% previous

• U.K GDP (YoY) 0.6%,0.9% forecast, 1.2% previous

• U.K Jan Manufacturing Production (MoM) 0.2%,0.2% forecast, 0.3% previous

• U.K Monthly GDP 3M/3M Change 0.0%,0.0% previous

• Portuguese Feb CPI (MoM) -0.6%,-0.6% forecast,-0.8% previous

• Portuguese Feb CPI (YoY) 0.4%,0.4% forecast, 0.8% previous

• US Feb Core CPI (YoY) 2.4%,2.3% forecast, 2.3% previous

• US Feb Core CPI (MoM) 0.2%,0.2 forecast, 0.2% previous

• US Feb CPI (MoM) 0.1%,0.2% forecast , 0.1% previous

Looking Ahead - Economic Data (GMT)

•14:30 US Crude Oil Inventories 2.266M forecast, 0.785M previous

•14:30 US Gasoline Production-0.040M previous

•18:00 US Feb Federal Budget Balance -236.3B, -33.0B previous

Looking Ahead - Economic events and other releases (GMT)

• No significant events

Fxbeat

EUR/USD: The euro strengthened against dollar on Wednesday, before a European Central Bank meeting on Thursday, where policymakers will face pressure to ease policy after Italy put its entire country on lockdown in an attempt to slow new coronavirus infections. ECB President Christine Lagarde was reported as having told EU leaders in a conference call on Tuesday night that policymakers were looking at all tools ahead of the meeting, particularly ones to provide “super-cheap” funding. The euro was up 0.48 percent at $1.1334. Immediate resistance can be seen at 1.1458 (Higher BB), an upside break can trigger rise towards 1.1500 (Psychological level).On the downside, immediate support is seen at 1.1224 (9 DMA), a break below could take the pair towards 1.1171(11 DMA).

GBP/USD: The British pound erased early gains against dollar on Wednesday after an unexpected interest rate cut by the Bank of England. Sterling last traded at $1.2940, almost flat on the day but tumbled from the day’s high of $1.2937 after the Bank of England cut its policy rate for the first time since August 2016, by 0.5 percentage point to 0.25%. The BoE’s move comes as a number of central banks and governments around the world stepped up efforts to shore up their economies from the economic impact of the coronavirus epidemic. Immediate resistance can be seen at 1.3002 (50 DMA), an upside break can trigger rise towards 1.3146 (Higher BB).On the downside, immediate support is seen at 1.2826 (Daily low), a break below could take the pair towards 1.2710 (Lower BB).

USD/CHF: The dollar declined against the Swiss franc on Wednesday, as investors worried over how much governments and central banks can do to limit the economic damage from the coronavirus epidemic. With the Federal Reserve and Bank of England having already cut rates this month, the pressure is on the European Central Bank to act when it meets on Thursday. At (GMT 13:00), Greenback dipped 0.71% versus the Swiss franc to 0.9333. Immediate resistance can be seen at 0.9471 (9 DMA), an upside break can trigger rise towards 0.9647 (21 DMA).On the downside, immediate support is seen at 0.9227 (Lower BB), a break below could take the pair towards 0.9200 (Psychological level).

USD/JPY: The dollar declined against the Japanese yen on Wednesday, as growing scepticism about Washington’s stimulus package to fight the coronavirus outbreak knocked greenback lower. Markets had been recovering from a brutal global selloff on Monday that was triggered by the double shock of an oil price crash and the worsening outbreak. The dollar lost 0.8% to 104.67 yen, down more than a full yen from Tuesday's high of 105.915.The dollar had fallen to as low as 101.18 on Monday. While Japan may already be in recession, its currency normally rises at times of major financial market stress because of the country’s current account surplus and its net creditor status.Strong resistance can be seen at 106.14 (9DMA), an upside break can trigger rise towards 106.96 (11 DMA).On the downside, immediate support is seen at 104.16 (Daily low), a break below could take the pair towards 102.39 (Lower BB).

Equities Recap

European stocks rose on Wednesday after the Bank of England joined other central banks in cutting interest rates, raising hopes for more co-ordinated monetary and fiscal stimulus to counter the economic shock from the coronavirus outbreak.

At (GMT 12:55),UK's benchmark FTSE 100 was last trading down at 0.50 percent, Germany's Dax was down by 0.10 percent, France’s CAC finished was up by 0.01 percent.

Commodities Recap

Gold prices rose on Wednesday after a steep fall in the previous session, as doubts about a stimulus package proposed by U.S. President Donald Trump to soften the economic impact of the coronavirus epidemic weighed on risk sentiment.

Spot gold was up 0.4% at $1,656.37 per ounce by 0242 GMT, having fallen nearly 2% on Tuesday on hopes for global stimulus measures. U.S. gold futures slipped 0.2% to $1,656.70.

Oil prices fell on Wednesday after Saudi Arabia and the United Arab Emirates announced plans to boost production capacity and the coronavirus fed worries about demand.

Brent crude was down $1.09 or almost 3% to $36.13 per barrel by 1221 GMT, while U.S. West Texas Intermediate (WTI) crude was off $1.06 or 3.1% at $33.30
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Treasury Recap

Italian government bond yields fell from recent highs on Wednesday on expectations the European Central Bank will boost monetary stimulus when it meets on Thursday, to counter the impact of the coronavirus outbreak on the European economy.

Italian government bond yields were down 6 to 7 basis points across the board, coming off recent highs. The benchmark 10-year government bond yield was lower 7 basis points at 1.31%, further off Tuesday’s two-month high of 1.458%.