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Europe Roundup: Sterling falls after downbeat UK PMI data, European shares slide,Gold gains, Oil drops on recession fears and China COVID curbs- May 24th,2022

Market Roundup

•Finnish Apr Import Price Index (YoY)  31.2% ,29.1%previous

•Finnish Apr Export Price Index (YoY)  34.1% ,30.1% previous

•UK Apr Public Sector Net Borrowing 17.80B ,17.85B forecast, 17.32B previous

•French May Business Survey  106 ,107 forecast,106 previous

•French May Manufacturing PMI  54.5,55.0 forecast,      55.7 previous

•French May Services PMI 58.4, 58.6 forecast,58.9 previous

•German May Manufacturing PMI  54.7 , 54.0 forecast,54.6 previous

•German May Services PMI  56.3 ,57.2 forecast, 57.6 previous

•EU May Services PMI 56.3 ,57.5 forecast, 57.7 previous

•EU May Manufacturing PMI  54.4 ,54.9 forecast, 55.5 previous

•EU May Markit Composite PMI  54.9 , 55.3 forecast, 55.8 previous

•UK Manufacturing PMI               54.6 ,55.8 previous

•UK Services PMI 51.8,56.9 forecast, 58.9 previous

•UK Composite PMI 51.8 ,58.2 previous

Looking Ahead - Economic Data (GMT)

•12:30 Canada Mar Wholesale Sales (MoM) 0.9% forecast, -0.4% previous

•12:30 US Apr Chicago Fed National Activity 0.44 previous

•12:30 Canada Manufacturing Sales (MoM) 2.5% previous

•12:55 Redbook (YoY) 12.7% previous

•13:00 Canada ADP Nonfarm Employment Change 475.0K previous

•13:45 US May  Manufacturing PMI  57.5 forecast, 59.2 previous

•13:45 US May  Services PMI   55.2 forecast, 55.6 previous

•13:45 US May  Markit Composite PMI  56.0 previous

•14:00 US Apr New Home Sales 750K forecast, 763K previous

•14:00 US Apr New Home Sales (MoM)  -8.6% previous

•14:00 US May Richmond Manufacturing Index 14 previous

Looking Ahead - Economic events and other releases (GMT)

•17:15 UK MPC Member Tenreyro Speaks  

•16:20 US Fed Chair Powell Speaks         

•18:00 ECB President Lagarde Speaks    

Fxbeat

EUR/USD: The euro held near one-month highs as odds narrowed on a July rate rise from the ECB. The European Central Bank is likely to raise its key interest rate out of negative territory by the end of September and could lift it further, ECB President Christine Lagarde said on Monday after policymakers had for weeks made the case for lift-off. Markets now see 110 basis points of rate hikes this year, or moves of more than a quarter of a percentage point at each of the ECB's policy meetings from July. The euro up at $1.0713, having bounced 1.2% overnight in its best session since early March. Immediate resistance can be seen at 1.0763(50%fib), an upside break can trigger rise towards 1.0855 (61.8%fib).On the downside, immediate support is seen at 1.0667(38.2%fib), a break below could take the pair towards 1.0547 (23.6%fib).

GBP/USD: The pound declined against dollar on Tuesday as downbeat UK May  PMI data weighed on pound. Momentum in Britain's economy slowed much more than expected this month, adding to recession worries as inflation pressures ratcheted higher, according to a business survey on Tuesday that showed rising pessimism.S&P Global's flash Composite Purchasing Managers' Index (PMI), a monthly gauge of the services and manufacturing industries, fell to 51.8 in May from 57.6 in April, its lowest level since February last year. The PMI is likely to raise new questions about the strength of demand in Britain's economy .Immediate resistance can be seen at 1.2587(38.2%fib),an upside break can trigger rise towards 1.2657(Higher BB).On the downside, immediate support is seen at 1.2467 (23.6%fib), a break below could take the pair towards 1.2425 (Lower BB).

USD/CHF: The dollar declined against the Swiss franc on Tuesday as a broad selloff in stock markets failed to boost the U.S. currency's safe haven appeal. Shares slid worldwide as disappointing company earnings and fears about slowing global economic growth punctured the mini rally of the last few trading days. The dollar, a rival safe-haven asset to Swiss franc, has been falling broadly alongside a decline in Treasury yields from multi-year peaks, with aggressive easing by the Federal Reserve already priced in. Immediate resistance can be seen at 0.9704(38.2%fib), an upside break can trigger rise towards 0.9723 (5DMA).On the downside, immediate support is seen at 0.9605(50% fib), a break below could take the pair towards 0.9582 (Lower BB ).

USD/JPY: The dollar dipped against the Japanese yen on Tuesday as declines in global stock markets and renewed investor concerns over slowing economic growth and monetary policy tightening weighed on dollar. Stock markets slid with U.S. stock futures down more than 2%.Trading was volatile with an index of currency market volatility holding firm at 9.6%, not far from a two-year high above 10.5% hit earlier this month. The dollar was 0.46 percent  lower versus the Japanese yen at 127.30.Strong resistance can be seen at 128.14(5DMA), an upside break can trigger rise towards 128.69(11DMA).On the downside, immediate support is seen at 127.16 (Lower BB), a break below could take the pair towards 126.82 (38.2%fib).

Equities Recap

European shares fell on Tuesday, tracking declines in global stock markets with business expansion data for May renewing investor concerns over slowing economic growth and monetary policy tightening.

At (GMT 09:38 ),UK's benchmark FTSE 100 was last trading down at 0.33 percent, Germany's Dax was down by 0.95 percent, France’s CAC was last down by 1.27 percent.

Commodities Recap

Gold prices firmed on Tuesday, as the U.S. dollar weakened to a one-month low for a second consecutive session, making greenback-priced bullion less expensive for overseas buyers.

Spot gold was up 0.3% at $1,858.19 per ounce, as of 0757 GMT, after rising to its highest since May 9 of $1,865.29 on Monday.U.S. gold futures rose 0.4% to $1,854.40.

Oil fell by almost $1 on Tuesday as concerns over a possible recession and China's COVID-19 curbs outweighed tight global supply and expectations of a pick-up in fuel demand with the U.S. summer driving season.

Brent crude fell 56 cents, or 0.5%, to $112.86 a barrel by 0815 GMT. U.S. West Texas Intermediate (WTI) crude dropped 72 cents, or 0.7%, to $109.57.

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