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Europe Roundup: Sterling gains against the dollar, European shares dips, Gold ticks up, Oil prices stabilise on IEA demand outlook-September 14th,2022

Market Roundup

•UK Aug PPI Input (YoY)  20.5%, 22.4% forecast, 22.6% previous

•UK Aug PPI Input (MoM)  -1.2%, 0.3% forecast, 0.1% previous

•UK Aug PPI Output (YoY) 16.1%, 17.4% forecast, 17.1% previous

•UK Aug CPI (YoY) 9.9%, 10.2% forecast, 10.1% previous

•UK Aug CPI (MoM ) 0.5%, 0.6%               forecast, 0.6% previous

•Sweden Aug CPI (YoY)  9.8%, 9.6% forecast,8.5% previous

•UK Aug Core RPI (YoY)  12.2%, 12.3% forecast, 12.3% previous

•UK Aug Core CPI (YoY)  6.3%, 6.3% forecast, 6.2% previous

•EU Jul Industrial Production (MoM) -2.3%,-1.0% forecast, 0.7% previous

Looking Ahead - Economic Data (GMT)

•12:30 US Aug PPI (MoM)   -0.1% forecast, -0.5% previous

•12:30 US Aug PPI (YoY) 8.8% forecast, 9.8% previous

•12:30 US Aug PPI ex. Food/Energy/Transport (MoM)  0.2% previous

•12:30 US Core PPI (MoM) 0.3%               forecast, 0.2% previous

•12:30 Canada Jul Manufacturing Sales (MoM) -0.9% forecast, -0.8% previous

•14:30 US  Crude Oil Inventories 0.833M forecast, 8.844M previous

•14:30 US Gasoline Inventories -0.858M forecast, 0.333M previous

•14:30   US Cushing Crude Oil Inventories -0.501M previous

Looking Ahead - Economic events and other releases (GMT)

•No events ahead


EUR/USD: The euro edged higher on Wednesday as the dollar pulled back, but gains were limited by bets for an aggressive Federal Reserve approach to U.S. inflation, which rose unexpectedly last month. U.S. Labor Department data showed on Tuesday the headline Consumer Price Index edged up 0.1% last month versus expectations for a 0.1% decline, while core inflation surged 0.6%.  The inflation data stoked expectations the Fed could raise U.S. borrowing costs faster and further than previously anticipated, with some even speculating there could be a 100-basis-point hike at the end of its Sept. 20-21 meeting. Immediate resistance can be seen at 1.0001(38.2%fib), an upside break can trigger rise towards 1.0100(38.2%fib).On the downside, immediate support is seen at 0.9956 (23.6%fib), a break below could take the pair towards 0.9882(Lower BB).

GBP/USD: Sterling gained against the dollar on Wednesday as the greenback moving broadly lower and British inflation unexpectedly eased for the first time in a year.The pound rose 0.5% to $1.1546, pulling away from its three-decade low of $1.14070 hit last week. Sterling has been hit hard this year by surging inflation, a looming recession and concerns that tax cuts and increased public spending under a new government could exacerbate price pressures. The slide in the currency, down more than 15% against the dollar in 2020, is also a headache for the Bank of England since it increases the cost of imports and can cause more imported inflation. Against the euro, it rose 0.2% to 86.59 pence. Immediate resistance can be seen at 1.1567(5DMA), an upside break can trigger rise towards 1.1747(38.2%fib).On the downside, immediate support is seen at 1.1452(23.6%fib),a break below could take the pair towards 1.1394 (Lower BB).

 USD/CHF: The dollar strengthened against the Swiss franc on Wednesday after hotter-than-expected U.S. inflation data boosted the dollar and fuelled expectations that the Federal Reserve will continue on aggressive policy tightening path. U.S. consumer prices unexpectedly rose in August and  underlying inflation accelerated amid rising costs for rents and healthcare, giving the Fed ammunition to deliver a third 75 basis points interest rate hike next Wednesday. The Fed is likely to raise U.S. borrowing costs faster and further than previously expected after the inflation data  . Immediate resistance can be seen at 0.9627(5DMA), an upside break can trigger rise towards 0.9667  (23.6% fib).On the downside, immediate support is seen at 0.9576 (38.2% fib), a break below could take the pair towards 0.9499 (50% fib).

USD/JPY: The dollar edged lower against yen on Wednesday after media reports the Bank of Japan conducted a rate check in apparent preparation for currency intervention, while other majors tried to regain the ground they'd lost a day earlier on the surging dollar. The dollar slid more than 1% to 142.9 yen after the Nikkei website reported the rate check, citing unidentified sources. In a rate check, central bank officials call up dealers and ask for the price of buying or selling yen. Strong resistance can be seen at 144.70(23.6%fib), an upside break can trigger rise towards 145.63(Higher BB).On the downside, immediate support is seen at 142.92(38.2%fib), a break below could take the pair towards 141.44(50%fib).

Equities Recap

European shares dipped at the opening bell on Wednesday after higher-than-expected U.S. inflation cemented views of a large interest rate hike by the Federal Reserve next week, but a rally in retailers led by Spain's Inditex kept declines to a minimum.

At (GMT 12:20),UK's benchmark FTSE 100 was last trading down at 1.68 percent, Germany's Dax was down by 1.30 percent, France’s CAC  was down by 0.97 percent.

Commodities Recap

Gold prices edged higher on Wednesday tracking a pullback in the dollar, though gains were capped by expectations the Federal Reserve will continue hiking interest rates aggressively following a surprisingly stronger U.S. inflation data.

 Spot gold  rose 0.2% to $1,704.60 per ounce by 0813 GMT. Prices saw their biggest one-day percentage decline since July 14 in the previous session.

Oil prices stabilised on Wednesday, after dropping by more than $1 earlier in the session, following signs of bullish demand in an International Energy Agency (IEA) report.

Brent crude futures rose 8 cents, or 0.09%, to $93.25 a barrel by 0933 GMT. U.S. West Texas Intermediate crude was at $87.35 a barrel, up 4 cents, or 0.05%.

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