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Europe Roundup: Sterling hits fresh 2-week high versus dollar ahead of US data, European shares mixed, Gold gains, Oil prices slip as market weighs new 2024 demand data-May 15th,2024

Market Roundup

•French Apr CPI NSA (MoM)  0.50%,0.50% previous

•French Apr   CPI NSA (YoY) 2.20%,2.20% previous

•French Apr    CPI (MoM)  0.5%,0.5% forecast,0.2% previous

•French Apr    HICP (YoY)  2.4%, 2.4% forecast,2.4% previous

•EU Apr Inflation (YoY)                  2.10%,2.10% previous

•French Apr  HICP (MoM) 0.6%,                0.6% forecast,0.2% previous

•French CPI (YoY)2.2%, 2.2% forecast,2.3% previous

•EU GDP (YoY) (Q1)0.4%,0.4% forecast,0.1% previous

•EU Mar Industrial Production (YoY)  -1.0%,-1.2% forecast,-6.4% previous

•EU Mar Industrial Production (MoM)  0.6%,0.5% forecast,0.8% previous

•EU Employment Change (QoQ)0.3%,0.3% forecast,0.3% previous

•EU Employment Change (YoY)1.0%,1.2% previous

•EU GDP (QoQ)                0.3%,0.3% forecast,-0.1% previous

Looking Ahead Economic Data (GMT)

•12:30  US Apr Retail Control (MoM)  1.1% previous

•12:30  US Apr Retail Sales Ex Gas/Autos (MoM)  1.0% previous

•12:30  US Apr Real Earnings (MoM)  0.3% previous

•12:30  US Apr Core Retail Sales (MoM) 0.2% forecast,1.1% previous

•12:30  US Apr Retail Sales (MoM) 0.4% forecast,0.7% previous

•12:30  US Apr Core CPI (YoY) 3.6% forecast,3.8% previous

•12:30  US Apr CPI (MoM) 0.4% forecast,0.4% previous

•12:30  US Apr Core CPI (MoM)  0.3% forecast,0.4% previous

•12:30 US Apr  CPI (YoY)  3.4%    forecast,3.5% previous

•12:30  US  May NY Empire State Manufacturing Index -9.90 forecast,-14.30 previous

•12:30 US Apr  CPI Index, n.s.a  313.76   forecast,312.33 previous

•12:30 US Apr  Core CPI Index  317.73 forecast,316.70 previous

•12:30 US Apr  CPI, n.s.a (MoM)  0.65% previous

•12:30 US Apr  CPI Index, s.a  312.23 previous

•12:30 US Apr  Retail Sales (YoY)  4.27% previous

•12:30 Canada Mar Manufacturing Sales (MoM)  -2.4% forecast,0.7% previous

•14:00   US May NAHB Housing Market Index  51 forecast,51 previous

•14:00   US Mar Retail Inventories Ex Auto -0.1%               forecast,-0.1% previous

•14:00   US Mar Business Inventories (MoM)  0.0% forecast,0.4% previous

•14:30   US  Crude Oil Inventories -0.400M forecast,-1.362M previous

•14:30   US  Gasoline Inventories 0.880M forecast,0.915M previous

Looking Ahead Events And Other Releases(GMT)

•16:00   US Atlanta Fed GDP Now (Q2)   4.2% forecast,4.2% previous

•16:00   US FOMC Member Kashkari Speaks       

•19:20   US FOMC Member Bowman Speaks

Currency Forecast

EUR/USD: The euro rose against dollar on Wednesday as investors awaited US consumer price report that could prove decisive about when the Federal Reserve cuts interest rates . CPI is expected to have risen by 0.4% in April, matching March's increase, according to   poll.Overnight data revealed that U.S. producer prices rose more than anticipated in April, indicating that inflation remained persistently high at the beginning of the second quarter. The dollar index , which measures the U.S. currency against six others, was down 0.2% at 104.84.Immediate resistance can be seen at 1.0835(23.6% fib), an upside break can trigger rise towards 1.0860(Higher BB).On the downside, immediate support is seen at 1.0757 (38.2% fib), a break below could take the pair towards  1.0728(Lower BB).

GBP/USD: Sterling hit its highest level in almost two weeks versus a weakening dollar and was broadly unchanged against the euro on Wednesday ahead of key U.S. inflation data.Meanwhile, British wages grew more than expected. Still, other figures suggested the labour market is losing some of its inflationary heat, keeping the BoE on alert about when to cut interest rates.Market bets on future BoE rate cuts remained roughly unchanged, discounting an around 50% chance of a first move in June while fully pricing in a 25 basis point (bps) rate cut in August and more than 50 bps by year-end. Sterling rose 0.18% to $1.2610 after hitting $1.2616, its highest level since May 3. Immediate resistance can be seen at 1.2623(38.2%fib), an upside break can trigger rise towards 1.2659(Higher BB).On the downside, immediate support is seen at 1.2564(38.2% fib), a break below could take the pair towards 1.2501 ( 50% fib).

 USD/CHF: The dollar eased against the Swiss franc on Wednesday as traders braced for a key U.S. inflation report later in the day that could dictate the path of Federal Reserve policy. The U.S. consumer price index data is due at 1230 GMT. Core inflation in April is seen rising 0.3% month-over-month, down from 0.4% the prior month, based on a Reuters poll. Data overnight showed U.S. producer prices increased more than expected in April, indicating that inflation remained stubbornly high early in the second quarter. The dollar fell 0.2% against a basket of currencies to hit a nearly two week low. Immediate resistance can be seen at 0.9076 (May 10th high), an upside break can trigger rise towards 0.9150 (23.6% fib).On the downside, immediate support is seen at 0.9039 (38.2% fib), a break below could take the pair towards 0.9017(Lower BB).

USD/JPY: The U.S. dollar declined against yen on Wednesday as market participants awaited key U.S. CPI data expected later in US session. Median forecasts predict that core consumer prices will increase by 0.3% for the month, compared to a 0.4% rise in March, which would bring the annual rate down to 3.6%. Fed Chair Jerome Powell gave a bullish assessment on Tuesday of where the U.S. economy stands, with an outlook for continued above-trend growth and confidence in falling inflation that, while eroded by recent data, remains largely intact. The dollar was last down 0.4% at 155.83 yen on Wednesday, having pushed as high as 156.80 overnight. Strong resistance can be seen at 156.92 (23.6%fib), an upside break can trigger rise towards 157.86(Higher BB).On the downside, immediate support is seen at 156.10(Daily low), a break below could take the pair towards 155.38(38.2% fib).

Equities Recap

Europe's benchmark index climbed to a record high on Wednesday, as investors cheered a handful of robust earnings from the likes of UK's Experian and Germany's Commerzbank, while they also buckled up for the highly anticipated U.S. inflation data.

UK's benchmark FTSE 100 was last  up by 0.08 percent, Germany's Dax was last  up by 0.33 percent, France’s CAC was last  down by 0.26 percent.

Commodities Recap

Gold prices rose on Wednesday, taking support from a weaker US dollar and lower Treasury yields, while investors awaited US consumer inflation data that could offer clues on how soon the Federal Reserve can cut interest rates.

Spot gold rose 0.5% to $2,368.62 per ounce, as of 0943 GMT. U.S. gold futures rose 0.6% to $2,374.40.

Oil prices slipped on Wednesday as International Energy Agency (IEA) data showed demand in developed countries was forecast to flag this year as inflation remains persistent.

Brent crude futures were down 54 cents or 0.6% at $81.84 a barrel at 1140 GMT. U.S. West Texas Intermediate crude futures (WTI) fell 50 cents or 0.6% to $77.52 a barrel.

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