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Europe Roundup: Sterling hovers near six-day highs vs dollar, European shares dips,Gold slips, Oil steady ahead of OPEC+ supply policy meeting-October 4th,2021

Market Roundup

•Swiss Aug Retail Sales (YoY)  0.9%-2.6% previous

•Spanish Unemployment Change 0.0%,-82.6K previous

• EU Oct Sentix Investor Confidence 16.9, 18.6  forecast, 19.6 previous

Looking Ahead Economic Data (GMT)

• 12:30 Canada Aug Building Permits (MoM)  -3.9% previous

• 13:00 French 6-Month BTF Auction -0.677% previous

• 13:00 French 3-Month BTF Auction -0.739% previous

• 13:00 French 12-Month BTF Auction -0.650% previous

•14:00 US Aug Factory orders ex transportation (MoM)  0.8% previous

•14:00 US Aug Durables Excluding Defense (MoM)  2.4% previous

•14:00 US Factory Orders (MoM)  1.0% forecast, 0.4% previous

•15:30 US 6-Month Bill Auction 0.050% previous

•15:30 US 3-Month Bill Auction 0.035% previous

Looking Ahead - Events, Other Releases (GMT)

•No significant events


EUR/USD: The euro edged higher against dollar on Monday as  concerns about China's property sector and inflation worries offset upbeat U.S. data .A host of U.S. economic data released on Friday also showed increased consumer spending and accelerated factory activity but also lofty inflation. The core U.S. PCE price index, the Federal Reserve's preferred inflation measure for its flexible 2% target, increased 3.6% in August from a year earlier, its biggest rise in three decades and matching July's gain.Immediate resistance can be seen at 1.1638 (50%fib), an upside break can trigger rise towards 1.1668(61.8%fib).On the downside, immediate support is seen at 1.1565(38.2%fib), a break below could take the pair towards 1.1566 (23.6%fib).

GBP/USD: Sterling hovered near its highest levels in almost a week against both the dollar  on Monday, as rising inflation expectations early last week saw bond yields climb higher and hit risk sentiment in equity markets, pushing sterling to its lowest levels since December 2020. Sterling moves closely in line with global risk sentiment. The pound has made a tentative recovery since the latter part of last week, hitting $1.3576 in early deals in London on Monday, its highest since Sept. 28. Immediate resistance can be seen at 1.3600(50%fib),an upside break can trigger rise towards 1.3668(61.8%fib).On the downside, immediate support is seen at 1.3531(38.2%fib), a break below could take the pair towards 1.3459(23.6%fib).

USD/CHF: The dollar dipped against Swiss franc on Monday as resurgent concerns over China Evergrande weighed on investor sentiment. A crackdown on debt has left Evergrande struggling to refinance its $305 billion in liabilities. Fears of contagion from a possible default coupled with a sluggish Chinese economy have rattled markets since last month. Immediate resistance can be seen at 0.9310 (38.2% fib), an upside break can trigger rise towards 0.9350 (Higher high).On the downside, immediate support is seen at 0.9266(38.2% fib), a break below could take the pair towards 0.9244(21DMA).

USD/JPY: The dollar strengthened against yen on Monday as widening concerns about the Chinese property sector and resilient U.S. Treasury yields boosted the appeal of the greenback against yen. After spending the second quarter of 2021 on the back foot the dollar has received a fresh boost in recent weeks, climbing to its highest levels in a year against its rivals last week as top investment banks have revised up their forecasts. Strong resistance can be seen at 111.26(38.2%fib), an upside break can trigger rise towards 111.76(23.6%fib).On the downside, immediate support is seen at 110.85(50%fib), a break below could take the pair towards 110.46(61.8%fib).

Equities Recap

European stocks struggled on Monday after their worst weekly showing since February, hit by a growing number of risks including signs of inflation, elevated bond yields and developer China Evergrande's financial troubles.

At (GMT 11:00 ),UK's benchmark FTSE 100 was last trading down at 0.07 percent, Germany's Dax was down by 0.28 percent, France’s CAC   was last down by 0.18 percent.

Commodities Recap

Gold eased off a more-than one-week high on Monday as U.S. Treasury yields firmed and the dollar recouped some losses but bullion held above key technical support of $1,750 buoyed by concern in wider markets about inflation.

Spot gold fell 0.5% to $1,751.24 per ounce by 0943 GMT, reversing gains from an initial climb to its highest since Sept. 23 at $1,765.54 during the Asian session. U.S. gold futures fell 0.4% to $1,751.80.

Oil was steady on Monday ahead of a meeting by OPEC and its allies which may determine whether a recent rally in prices amid supply shocks and a recovery from the COVID-19 pandemic will be sustained.

Brent crude was up 20 cents or 0.3% at $79.48 per barrel by 1101 GMT. It rose 1.5% last week, its fourth weekly gain in a row. U.S. oil rose 1 cent or 0.1% to $75.98, after gaining for the past six weeks.


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