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Europe Roundup: Sterling edges lower against dollar after UK GDP data fails to impress, European stocks extend gains, Gold eases, Oil rises to fresh multi-year highs on demand recovery-June 11th,2021

Market Roundup

• UK Index of Services 1.4%,-2.0% previous

• UK Monthly GDP 3M/3M Change 1.5%,-1.5% previous

• UK GDP (MoM) 2.3%,2.2% forecast, 2.1% previous

• German May WPI (YoY)  9.7%, 7.2% previous

• German May WPI (MoM)  1.7%, 1.1% previous             

• UK Apr Industrial Production (MoM)  -1.3%, 1.2% forecast, 1.8% previous        

• UK Apr Trade Balance Non-EU  -5.55B, -6.55B previous              

• U.K. Apr Construction Output (YoY)  77.9%, 83.4% forecast, 6.0% previous

• U.K. Apr Construction Output (MoM)  -2.0%, 1.4% forecast, 5.8% previous

• U.K. Apr Manufacturing Production (MoM)  -0.3%,1.5% forecast, 2.1% previous

• U.K. Apr Manufacturing Production (YoY)   39.7%,41.8% forecast, 4.8% previous

• U.K. Apr Industrial Production (YoY)  27.5%,30.5% forecast, 3.6% previous

• U.K. Apr Trade Balance  -10.96B, -12.10B forecast, -11.71B previous

•Spanish May CPI (YoY)  2.7%, 2.7% forecast, 2.2% previous

•Spanish May HICP (YoY)  2.4%, 2.4% forecast, 2.0% previous

Looking Ahead - Economic data (GMT)

•12:30 Canada Capacity Utilization Rate (Q1) 80.6% forecast, 79.2% previous

•13:00 Russia Apr Trade Balance 11.00B forecast, 10.02B previous

•14:00 US Michigan Jun Consumer Expectations 79.0 forecast, 78.8 previous

•14:00 US Michigan Jun Consumer Sentiment  84.0 forecast, 82.9 previous

•14:00 US June Michigan Current Conditions 92.3 forecast, 89.4 previous

•14:00 US Jun Michigan 5-Year Inflation Expectations 3.00% previous     

•14:00 US Jun Michigan Inflation Expectations 4.6% previous     

Looking Ahead - Economic events and other releases (GMT)

•No significant events


EUR/USD: The euro declined against dollar on Friday as a dovish outcome to the ECB meeting a day earlier continued to weigh on euro. On Thursday, the European Central Bank maintained an elevated pace of pandemic emergency bond purchases (PEPP) for the third quarter. Though it upgraded its economic projections for this year and next, underlying inflation is still expected to stay below the ECB’s target at least through 2023, suggesting that support will be maintained in the aftermath of the PEPP programme, which expires next year. Immediate resistance can be seen at 1.2173( 61.8%fib), an upside break can trigger rise towards 1.2195 (50%fib).On the downside, immediate support is seen at 1.2129 (38.2%fib), a break below could take the pair towards 1.2087 (50%Fib).

GBP/USD: The pound edged lower against dollar on Friday after data showed Britain’s recovery from the COVID-19 pandemic   in April was slightly disappointing. Britain’s GDP was a record 27.6% higher than a year earlier when the virus was rampant. But economic output remained 3.7% below its level in February 2020, before the pandemic led to lockdown measures. Sterling fell 0.1% versus the dollar to $1.4150, after falling to a one-month low of $1.4071 on Thursday. Immediate resistance can be seen at 1.4191 (June 9th high), an upside break can trigger rise towards 1.4245(23.6%fib).On the downside, immediate support is seen at 1.4150 (21DMA), a break below could take the pair towards 1.4130(38.2%fib).

USD/CHF: The dollar strengthened against the Swiss franc on Friday as markets shrugged off Thursday's high U.S. inflation number, believing the Federal Reserve's stance   is likely to be a temporary blip. Currency markets had been sluggish all week in anticipation of the data, but when it came in above expectations, there was little market reaction. The Federal Reserve has repeatedly said that it expects any rise in inflation to be temporary and that it is too soon to be discussing reducing its monetary stimulus.  At 12:10 GMT, the dollar was 0.35 percent higher versus the Swiss franc at 0.8974. Immediate resistance can be seen at 0.8981 (21 DMA), an upside break can trigger rise towards 0.9018 (38.2% fib).On the downside, immediate support is seen at 0.8929 (23.6% fib), a break below could take the pair towards 0.8917 (Lower BB).

USD/JPY: The dollar gained against the Japanese yen on Friday after inflation data calmed concerns over a possible long-term spike in rising prices, with investors now turning focus to next week's Federal Reserve meeting for more cues on monetary policy. With recent data also indicating weakness in the labor market, the Fed is widely expected to maintain accommodative policy, which is positive for   risk-driven assets. Strong resistance can be seen at 109.57(11DMA), an upside break can trigger rise towards 109.71 (38.2%fib).On the downside, immediate support is seen at 109.25(50%fib), a break below could take the pair towards 109.00 (Psychological level).

Equities Recap

European stocks extended gains for a sixth session on Friday, buoyed by hopes that major central banks will stay accommodative despite signs of rising inflation, while gains in miners and travel firms supported regional indexes.

At (GMT 12:10 ),UK's benchmark FTSE 100 was last trading up at 0.55 percent, Germany's Dax was up  by 0.47 percent, France’s CAC  was last up  by 0.72percent.

Commodities Recap

Gold prices edged lower on Friday as the dollar held steady with some investors betting on rising U.S. consumer prices being temporary.

Spot gold was down 0.2% to $1,894.06 per ounce by 0913 GMT. U.S. gold futures rose 0.1% to $1,898.40.

Oil prices rose on Friday to fresh multi-year highs and were set for their third weekly jump on expectations of a recovery in fuel demand in the United States, Europe and China as rising vaccination rates lead to an easing of pandemic curbs.

Brent crude futures edged up 13 cents to $72.65 a barrel to 1145 GMT, a day after closing at their highest since May 2019.

U.S. West Texas Intermediate (WTI) crude futures were up 14 cents to $70.43 a barrel, a day after their highest close since October 2018.

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