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Europe Roundup: Sterling dips as risk sentiment sours, European stocks hit 2-month lows, Gold eases,Oil slips to $78-October 1st,2021

Market Roundup

•German Aug Retail Sales (YoY)  0.4%1.9%forecast, -0.3% previous

•German Aug Retail Sales (MoM)   1.1%,1.5% forecast, -5.1% previous

• Spanish Sep Manufacturing PMI 58.1,58.2 forecast, 59.5 previous

•Italian Sep Manufacturing PMI 59.7, 59.4 forecast, 60.9 previous

•French Sep Manufacturing PMI  55.0, 55.2 forecast, 55.2 previous

•German Sep Manufacturing PMI  58.4,58.5forecast, 58.5 previous

•UK Sep Manufacturing PMI  57.1,56.3 forecast, 56.3 previous

•EU Sep CPI (YoY)  3.4%,.3% forecast, 3.0% previous

•EU Core CPI (YoY) 1.9%, 1.6% previous

Looking Ahead Economic Data (GMT)

•12:30 US Aug Personal Income (MoM)  0.3% forecast, 1.1% previous

•12:30 US Aug Real Personal Consumption (MoM)  -0.1% previous

•12:30 US Aug PCE price index (MoM)  0.4% previous

•12:30 US PCE Price index (YoY)  4.2 previous

•12:30 US Aug Personal Spending (MoM)  0.6% forecast ,0.3% previous

•12:30 US Aug Core PCE Price Index (YoY)  3.6% forecast , 3.6% previous

•12:30 US Jul GDP (MoM)  -0.2% forecast , 0.7% previous

•14:00 US Sep Manufacturing PMI  60.5 previous

•14:00 US Sep ISM Manufacturing PMI  59.6 forecast , 59.9 previous

•14:00 US Sep ISM Manufacturing Employment  49.0 previous

•14:00 US Sep ISM Manufacturing New Orders Index 66.7 previous

•14:00 US Sep Michigan Consumer Sentiment  71.0 forecast , 71.0 previous

•14:00 US Sep Michigan Current Conditions  77.1 previous

•14:00 US Sep Michigan Consumer Expectations 67.1 previous

•16:00 US Aug Dallas Fed PCE  3.20% previous

Looking Ahead - Events, Other Releases (GMT)

•17:00 US FOMC Member Harker Speaks


EUR/USD: The euro traded near recent lows  on Friday as dollar strengthened as investors expected a hawkish-sounding Federal Reserve to lift U.S. interest rates sooner than its major peers. Cautious market sentiment due to COVID-19 concerns, wobbles in China’s growth and a Washington gridlock ahead of a looming deadline to lift the U.S. government’s borrowing limit also lent support to the dollar which is seen as a safe-haven asset. The euro was steady on Friday at $1.1582, but has fallen about 1.3% during the week, and through major support around $1.16, to touch its lowest levels since July 2020.Immediate resistance can be seen at 1.1608 (38.2%fib), an upside break can trigger rise towards 1.1638(50%fib).On the downside, immediate support is seen at 1.1565(23.6%fib), a break below could take the pair towards 1.1500(Psychological level).

GBP/USD: Sterling was set on Friday for its third worst week in the past year as risk sentiment soured across global financial markets while a shortage of truck drivers and a surge in energy prices disrupt and blacken the prospects of Britain’s economy.While markets have brought forward their expectations for the Bank of England to raise interest rates, the likely incoming tightening of monetary policy has failed to prop up the currency, not far from nine-month lows touched the previous day. At 0815 GMT, the pound was down 0.15% at 86.06 pence against the euro and losing 0.17% versus the dollar at $1.3450 .Immediate resistance can be seen at 1.3525(50%fib),an upside break can trigger rise towards 1.3575 (61.8%fib).On the downside, immediate support is seen at 1.3571(38.2%fib), a break below could take the pair towards 1.3407(23.6%fib).

USD/CHF: The dollar strengthened against Swiss franc on Friday as currency markets braced for U.S. interest rates to rise before those of major peers. The dollar traded near its highest levels of the year, bolstered by a surge in U.S. Treasury yields on growing expectations the Federal Reserve will taper its asset purchases by year-end and hike rates in 2022. The dollar index, which measures the currency against six major rivals, was off Thursday’s one-year high of 94.504, last changing hands at 94.287. Meanwhile, the benchmark 10-year U.S. Treasury yield was at 1.5013%. Immediate resistance can be seen at 0.9350(Higher BB), an upside break can trigger rise towards 0.9369 (23.6% fib).On the downside, immediate support is seen at 0.9312(38.2% fib), a break below could take the pair towards 0.9292(5DMA).

USD/JPY: The dollar retreated from recent high against yen on Friday ahead of key readings on inflation and industrial activity, while progress towards a bipartisan infrastructure package remained in focus. All eyes are now on consumer spending, inflation and factory activity data later in the day for signs of economic health and clues regarding the Federal Reserve’s timeline for tapering its asset purchases and hiking key interest rates. President Joe Biden signed a measure to continue funding the government through Dec. 3, although congressional Democrats and Republicans continued brawling over raising the debt ceiling beyond $28.4 trillion to avert a U.S. credit default. Strong resistance can be seen at 111.95(23.6%fib), an upside break can trigger rise towards 120.00(Psychological level).On the downside, immediate support is seen at 111.46(38.2%fib), a break below could take the pair towards 111.35(5DMA).

Equities Recap

European stocks slumped to their lowest in two months on Friday, as warnings from companies and factory activity data highlighted the economic headwinds from supply-chain constraints and elevated prices.

At (GMT 10:50 ),UK's benchmark FTSE 100 was last trading down at 1.05 percent, Germany's Dax was down by 0.71 percent, France’s CAC   was last down by 0.66 percent.

Commodities Recap

Gold eased on Friday as the dollar firmed on bets for interest rate increases but bullion still held above the pivotal $1,750 technical support level en route to a small weekly gain as worries about rising inflation and growth hurt risk sentiment.

Spot gold fell 0.2% to $1,753.67 per ounce by 0915 GMT. U.S. gold futures eased 0.2% to $1,754.30.

Oil fell to around $78 a barrel on Friday on the prospect that OPEC+ producers might step up a planned increase in output to ease supply concerns, although crude remained in sight of a three-year high reached this week.

Brent crude fell 47 cents, or 0.5%, to $77.84 at 1015 GMT, heading for a weekly decline after three weeks of gains. U.S. West Texas Intermediate (WTI) slipped 53 cents to $74.50, set for a sixth consecutive week of rises.

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