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Europe Roundup: Sterling falls to lowest since early September against dollar, European shares rises, Gold dips 3%,Oil near $30 as recession fears, pump war weigh-March 17th,2020

Market Roundup

• UK Jan Average Earnings ex Bonus 3.1%,3.2% forecast, 3.2% previous

• UK Jan Average Earnings Index +Bonus 3.1%,3.0% forecast, 2.9% previous

• UK Feb Claimant Count Change 17.3K, 21.4K forecast, -0.2K previous

• UK Jan Employment Change 3M/3M (MoM) 184K, 143K forecast, 180K previous

• UK Jan Unemployment Rate 3.9%, 3.8% forecast, 3.8% previous

• German March ZEW Current Conditions -43.1, -30.0 forecast, -15.7 previous

• German March ZEW Economic Sentiment -49.5, -26.4 forecast , 8.7 previous

• EU Wages in euro zone (YoY) (Q4) 2.30%, 2.60% previous

• EU Labor Cost Index (YoY) (Q4) 2.40%,3.00% forecast, 2.60% previous

• EU March ZEW Economic Sentiment -49.5, 10.4 previous

Looking Ahead - Economic Data (GMT)

• 12:55 US Feb Redbook (YoY) 6.0% previous

• 12:55 US Feb Redbook (MoM) -0.1% previous

• 13:00 US Feb Utilization Rate 77.1% forecast, 76.8% previous

• 13:00 US Feb Industrial Production (YoY) -0.83% previous

• 13:00 US Industrial Production (MoM) 0.4% forecast, -0.3% previous

• 13:00 US Feb Manufacturing Production (MoM) 0.3% , -0.1% previous

• 14:00 US Jan Business Inventories (MoM) -0.1%,0.1% previous

• 14:00 US Jan JOLTs Job Openings 6.476M forecast, 6.423M previous

• 14:00 US Jan Retail Inventories Ex Auto 0.3% previous

Looking Ahead - Events, Other Releases (GMT)

• No significant events


EUR/USD: The euro declined against dollar on Tuesday, after data showed mood among German investors slumped in March due to impact of the coronavirus outbreak on Europe’s largest economy. The ZEW research institute’s monthly survey showed economic sentiment among investors collapsed to -49.5 from 8.7 in February. This was the biggest drop since the survey began in 1991. Economists had expected a drop to -26.4. The euro was down 1.76 percent at $1.0983. Immediate resistance can be seen at 1.1066 (100 DMA), an upside break can trigger rise towards 1.1139 (5 DMA.On the downside, immediate support is seen at 1.0972 (Daily low), a break below could take the pair towards 1.9700 (Psychological level).

GBP/USD: Sterling dropped to its lowest level against the U.S. dollar since early September on Tuesday, as Britain toughened its approach to containing the coronavirus outbreak. The pound has been in retreat as fears about the likely full economic impact of the pandemic have roiled global markets and sent investors fleeing to assets seen as relative safe havens, including the dollar. The pound fell as much as 0.6% to $1.2192 on Tuesday. Against the euro it edged up 0.2% to 91.06 pence per euro, but was still trading near the previous day’s six-month low of 89.89 pence. Immediate resistance can be seen at 1.2274 (Daily high), an upside break can trigger rise towards 1.2409 (5 DMA).On the downside, immediate support is seen at 1.284 (Daily low), a break below could take the pair towards 1.2800 (Psychological level).

USD/CHF: The dollar strengthened against the Swiss franc on Tuesday, as nervous traders stuck with the most liquid currency amid very fragile sentiment. Market liquidity was tight and investors remained very cautious after coordinated moves by central banks failed to quell anxiety about the coronavirus pandemic. Investors are now waiting to see the scale of government fiscal responses to battle the economic fallout from the virus and limit the economic contraction. At (GMT 13:22), Greenback gained1.51% versus the Swiss franc to 0.9610. Immediate resistance can be seen at 0.9618 (Daily high), an upside break can trigger rise towards 0.9669 (50 DMA).On the downside, immediate support is seen at 0.9473 (5 DMA), a break below could take the pair towards 0.9446 (11 DMA).

USD/JPY: The dollar gained against the Japanese yen on Tuesday, as dollar won a brief reprieve on signs of more economic support from policymakers. Market liquidity was light and investors remained nervous after coordinated moves by central banks had spectacularly failed to quell trepidation over the coronavirus pandemic. The dollar rose 0.5% to 106.98 yen, having risen as much as 1.3% to 107.18 as U.S. stock futures bounced back 3% after a 10% fall of more than 10% the previous day. Still, the dollar was down 1.6% so far this week. Strong resistance can be seen at 107.81 (21 DMA), an upside break can trigger rise towards 108.91 (50 DMA).On the downside, immediate support is seen at 105.86 (5 DMA), a break below could take the pair towards 105.00 (Psychological level).

Equities Recap

European shares rose on Tuesday, following a sharp sell-off in the previous session triggered by panic over the hold that the coronavirus has over Europe and the resulting damage to business activity and company finances globally.

At (GMT 13:03),UK's benchmark FTSE 100 was last trading down at 1.44 percent, Germany's Dax was down by 1.24 percent, France’s CAC finished was down by 0.76 percent.

Commodities Recap

Gold tumbled 3% on Tuesday, while other precious metals also extended a free fall from the previous session as fears over the global economic toll from the fast-spreading coronavirus prompted investors to dump most assets and hoard cash.

Spot gold fell 2.8% to $1,471.98 per ounce by 1024 GMT, having slumped as much as 5.1% on Monday to its lowest since November 2019. U.S. gold futures were down 1% to $1,472.40.

Oil traded near $30 a barrel on Tuesday, close to its lowest since 2016, and analysts said more declines may follow as the coronavirus pandemic hits demand and Saudi Arabia and Russia battle for market share.

Brent crude slipped 5 cents to $30.00 a barrel at 1157 GMT, having earlier touched $31.25. On Monday it sank to $29.45, the lowest since January 2016.

U.S. West Texas Intermediate (WTI) crude reversed most of an earlier 4.7% gain to stand at $29.16.

Treasuries Recap

Germany’s benchmark 10-year Bund yield rose to a one-month high on Tuesday on growing expectations of higher government spending to combat the fallout from coronavirus, while borrowing costs in France and Spain hit their highest since last May.

Germany’s 10-year bond yield rose to -0.40% a one-month high.French 10-year bond yields rose to 0.26%, their highest level since May last year.

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