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Europe Roundup: Sterling steadies as rising interest rate expectations provide support , European shares rally ,Gold ticks lower, Oil extends losses as U.S. mulls strategic reserve sales-October 7th,2021

Market Roundup

•Swiss Sep Unemployment Rate s.a.  2.8%,2.8% forecast, 2.9% previous

•Swiss Sep Unemployment Rate n.s.a. 2.6%,2.8% forecast, 2.7% previous

•German Aug Industrial Production (MoM)   -4.0%,-0.4% forecast, 1.0% previous

•UK Sep Halifax House Price Index (MoM) 7.4%, 0.7% previous

• French Aug Current Account  -1.30B,-3.50B previous

• French Aug Exports  42.3B,40.7B previous

• French Aug Imports 49.0B, 47.6B previous

• UK Labour Productivity (Q2) 4.3%,0.9% previous

Looking Ahead Economic Data (GMT)

•12:30 US Continuing Jobless Claims 2,780K forecast, 2,802K previous

•12:30 US Jobless Claims 4-Week Avg 340.00K previous

•12:30 US Initial Jobless Claims 348K forecast, 362K previous

•14:00 Canada Sep Ivey PMI  66.0 previous

•14:00 Canada Sep Ivey PMI n.s.a  63.8 previous

•US 19:00 US Aug Consumer Credit  17.50B forecast, 17.00B previous

Looking Ahead - Events, Other Releases (GMT)

•16:00 Canada BoC Gov Macklem Speaks

• 15:45 ECB's Lane Speaks

• 12:40 FOMC Member Williams Speaks

• 11:30 ECB Publishes Account of Monetary Policy Meeting


EUR/USD: The euro declined on Thursday as broad dollar buying and soured risk sentiment weighed on euro. Focus is on the European Central Bank on Thursday, which will release its September meeting accounts at 0930 GMT. Speeches by chief economist Philip Lane from 0830 GMT as well as executive board member Isabel Schnabel at 1300 GMT will also be watched. The U.S. currency was steady at $1.1552 per euro after strengthening to $1.1529 on Wednesday for the first time since July of last year. Immediate resistance can be seen at 1.1572 (50%fib), an upside break can trigger rise towards 1.1604(61.8%fib).On the downside, immediate support is seen at 1.1540(38.2%fib), a break below could take the pair towards 1.1516 (23.6%fib).

GBP/USD: Sterling steadied versus the dollar on Thursday with the prospects of a Bank of England rate hike reduced downside potential for the currency.Sterling has erased all of its strong 2021 gains as concerns weighed about British economic growth and rising inflation, as the country grapples with a fuel crisis. The British currency was flat versus the dollar at $1.3584 at 0838 GMT., after marching on Wednesday towards a December 2020 low touched last week amid a sharp rise in energy prices. Immediate resistance can be seen at 1.3620(50%fib),an upside break can trigger rise towards 1.3665(21DMA).On the downside, immediate support is seen at 1.3553(38.2%fib), a break below could take the pair towards 1.3472(23.6%fib).

USD/CHF: The dollar declined against Swiss franc on Thursday as concerns that surging energy prices will stoke inflation while increased interest rates drove investors towards safe-haven assets. The next U.S. event in focus for global investors is payrolls data due Friday, with investors anticipating that a reasonable figure will mean the U.S. Federal Reserve will begin tapering its massive stimulus programme at its November meeting. Immediate resistance can be seen at 0.9284 (38.2% fib), an upside break can trigger rise towards 0.9310 (6th Oct high).On the downside, immediate support is seen at 0.9254(21DMA), a break below could take the pair towards 0.9238(50%fib).

USD/JPY: The dollar steadied against yen on Thursday as greenback regained strength ahead of U.S. payrolls data on Friday seen as key to the Federal Reserve’s next move. The U.S. dollar was steady near a one-year high, buoyed by inflation concerns and expectations that the Fed would have to act sooner to normalise policy.Meanwhile, a strong showing of private jobs in September ahead of Friday’s employment numbers fuelled bets that the Fed could start tightening monetary stimulus soon. The dollar gained 0.25% to 111.19 yen. Strong resistance can be seen at 111.35(Oct 7th hgh), an upside break can trigger rise towards 111.76(23.6%fib).On the downside, immediate support is seen at 111.26(38.2%fib), a break below could take the pair towards 110.85(61.8%fib).

Equities Recap                                                                      

European stocks rallied on Thursday, as easing oil and gas prices offered relief to investors worried about runaway inflation, while positive earnings updates in the construction and materials sector added to the upbeat sentiment.

At (GMT 11:11 ),UK's benchmark FTSE 100 was last trading up at 1.15 percent, Germany's Dax was up by 1.17 percent, France’s CAC   was last up by 1.52 percent.

Commodities Recap

Gold prices eased in a tight range on Thursday as investors steered clear of big bets before U.S. jobs data that could determine the Federal Reserve’s monetary policy normalisation plans.

Spot gold was down 0.2% at $1,759.31 an ounce by 0904 GMT while U.S. gold futures were little changed at $1,761.20.

Oil prices fell sharply on Thursday, extending losses from the previous session, as the United States said it was considering selling oil from its strategic reserves and as Russia said it was ready to stabilise the natural gas market.

Brent crude prices fell $1.24, or 1.5%, to $79.84 a barrel by 0918 GMT, after falling to a session low of $79.08. WTI crude futures fell $1.69, or 2.2%, to $75.74 a barrel, having hit a session low of $74.96.


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