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Europe Roundup: Sterling edges lower against dollar, European stocks edge higher, Gold firms, Oil prices extend gains to multi-year highs on tight supply-October 25th,2021

Market Roundup

• German Oct Current Assessment 100.1, 99.4 forecast, 100.4 previous

• German Oct Ifo Business Climate Index 97.7, 97.9 forecast, 98.8 previous

• German Oct Business Expectations 95.4, 96.4 forecast, 97.3 previous

Looking Ahead Economic Data (GMT)

•12:30 Canada Wholesale Sales (MoM) 0.3% previous

•12:30 Brazil Sep Bank lending (MoM)  1.5% previous

•12:30 US Sep Chicago Fed National Activity  0.29 previous

•13:00 French 6-Month BTF Auction -0.667% previous

•13:00 French 3-Month BTF Auction -0.732% previous

•13:00 French 12-Month BTF Auction -0.629% previous

•14:30 US Oct Dallas Fed Mfg Business Index  4.6 previous

•14:30 US 6-Month Bill Auction 0.060% previous

•14:30 3-Month Bill Auction 0.055% previous

Looking Ahead - Events, Other Releases (GMT)

•UK MPC Member Tenreyro Speaks


EUR/USD: The euro edged lower against dollar on Monday as traders continued to focus on the prospect of interest rate hikes and tightening outside of the United States. Currency markets were broadly quiet at the start of the week with traders awaiting U.S. growth data and central bank meetings in the euro zone, Japan and Canada. The euro s dipped 0.07 percent at $1.1647. Immediate resistance can be seen at 1.1658 (38.2%fib), an upside break can trigger rise towards 1.1708(50%fib).On the downside, immediate support is seen at 1.1592 (23.6%fib), a break below could take the pair towards 1.1500(Psychological level).

GBP/USD: The British pound initially gained but gave up ground on Monday as concerns about economic growth and inflation weighed on the British currency which benefited last week from expectations that the Bank of England will raise rates. Money markets are pricing in a rate hike by the central bank at its meeting on Nov. 4.However, data from the UK last week was mixed, PMIs rose as the economy unexpectedly regained momentum in October, but retail sales figures were worse than expected, sending the pound lower. Immediate resistance can be seen at 1.3803(23.6%fib),an upside break can trigger rise towards 1.3856(Higher BB).On the downside, immediate support is seen at 1.3726(38.2%fib), a break below could take the pair towards 1.3687(50%fib).

USD/CHF: The dollar strengthened against Swiss franc on Monday as investors cautiously eyed the next Federal Reserve meet for guidance on its monetary policy .Traders also waited for the third-quarter U.S. GDP figures due Thursday, with flash euro area CPI readings for October also a key indicator after the gauge jumped to a 2008 high last month. Immediate resistance can be seen at 0.9210(9DMA), an upside break can trigger rise towards 0.9225 (50%fib).On the downside, immediate support is seen at 0.9191(38.2%fib), a break below could take the pair towards 0.9149(23.6%fib).

USD/JPY: The dollar was little against yen on Monday  as traders weighed the prospect of inflation hastening the pace of rate hikes outside the United States, with a wary eye on commodity prices, U.S. growth data. The dip pulled the dollar index to a one-month low and extends softness after Federal Reserve Chair Jerome Powell said on Friday it not yet time to begin raising interest rates. The dollar index edged down as far as 0.2% to 93.483. The yen, which leapt on Friday, eased slightly to 113.63 per dollar.  Strong resistance can be seen at 113.85 (38.2%fib), an upside break can trigger rise towards 114.39(23.6%fib).On the downside, immediate support is seen at 113.33(50%fib), a break below could take the pair towards 112.94(61.8%fib).

Equities Recap

Most European stock indexes tiptoed higher on Monday, led by commodity and banking stocks, while investors awaited a flurry of earnings reports with several behemoths set to post results this week.

At (GMT 10:11 ),UK's benchmark FTSE 100 was last trading up at 0.46 percent, Germany's Dax was up by 0.26  % percent, France’s CAC   was last down by 0.08 percent.   

Commodities Recap

Gold prices hovered close to the key $1,800 level on Monday, supported by a weaker dollar as investors assessed the Federal Reserve’s likely response to inflationary pressure after its chair said inflation could last longer than expected.

Spot gold was up 0.3% at $1,797.81 per ounce, as of 0712 GMT. U.S. gold futures gained 0.1% to $1,797.20.

 Oil prices extended pre-weekend gains on Monday to hit multi-year highs, lifted by tight global supply and strengthening fuel demand in the United States and beyond as economies recover from pandemic-induced slumps.

Brent crude futures rose by 81 cents, or 1%, to $86.34 a barrel, following on from last Friday's 1.1% gain. Earlier on Monday they touched $86.43, the highest price since October 2018.

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