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Europe Roundup: Sterling steadies near 21-month low ahead of BoE, Fed, European shares falls,Gold steady, Oil jumps 4% as EU proposes ban on Russian oil-May 4th,2022

Market Roundup

•German Mar Imports (MoM) 3.4%,1.0% forecast, 4.5% previous

•German Mar Trade Balance 3.2B, 9.8B forecast, 11.5B previous

•German Mar Exports (MoM) -3.3%,-2.0% forecast, 6.4% previous

•Sweden Apr Services PMI (MoM)  68.1, 65.3 previous

•Spanish Apr Services PMI 57.1,                55.9 forecast, 53.4 previous

•Italian Apr Services PMI 55.7, 54.5 forecast, 52.1 previous

•French Apr Services PMI  58.9,                58.8 forecast, 57.4 previous

•German Apr Services PMI  57.6               , 57.9 forecast, 56.1 previous

•EU Apr Services PMI  57.7, 57.7 forecast, 55.6 previous

•EU Apr Markit Composite PMI  55.8, 55.8 forecast, 54.9 previous

•EU Mar Retail Sales (YoY)  0.8%, 1.4% forecast,  5.0% previous

•EU Mar Retail Sales (MoM)  -0.4%,-0.1% forecast, 0.3% previous

•Canada Apr ADP Nonfarm Employment Change 247K, 395K forecast, 455K previous

•Canada Mar Imports  61.14B, 58.11B forecast, 56.08B previous

•Canada Mar Trade Balance 2.49B, 3.90B forecast, 2.66B previous

•Canada Exports 63.63B,61.76B forecast, 58.75B previous

•US Mar Trade Balance -109.80B, -107.00B forecast, -89.20B previous

•US Imports 351.50B,  317.80B previous

•US Exports 241.70B, 228.60B previous

•US Apr Markit Composite PMI  56.0, 55.1 forecast, 57.7 previous

•US Apr Services PMI  55.6, 54.7 forecast, 58.0 previous

•US Apr ISM Non-Manufacturing New Orders   54.6, 60.1 previous

•US Apr ISM Non-Manufacturing Employment 49.5, 54.0 previous

•US Apr ISM Non-Manufacturing PMI 57.1, 58.5 forecast, 58.3 previous

Looking Ahead - Economic Data (GMT) 

•14:30 US Cushing Crude Oil Inventories 1.298M previous

•14:30 US Crude Oil Inventories -0.829M forecast, 0.692M previous

Looking Ahead - Economic events and other releases (GMT)

•18:00 US Fed Interest Rate Decision 1.00% forecast, 0.50% previous

•18:00 US FOMC Statement

•18:30 US FOMC Press Conference

 Fxbeat

EUR/USD: The euro gained against the U.S. dollar Wednesday ahead of a U.S. Federal Reserve policy meeting which is expected to deliver a new round of post-pandemic monetary tightening to contain inflation. The Fed is expected to raise interest rates by half of a percentage point and announce the start of reductions to its $9 trillion balance sheet. Money markets are currently pricing in 258 bps of Fed rate rises this year, including a 90% chance of a 50 bps on Wednesday. Dollar strength has weighed on other currencies, pushing the euro last week to two-decade lows around $1.0469. It stood at $1.0542  on Wednesday. Immediate resistance can be seen at 1.0587 (38.2%fib), an upside break can trigger rise towards 1.0638(11DMA).On the downside, immediate support is seen at 1.0482(23.6%fib), a break below could take the pair towards 1.0400 (Psychological level).

GBP/USD: The British pound steadied near 21-month low, ahead of central bank meetings at the Federal Reserve and Bank of England (BoE).The BoE policy announcement on Thursday will be the key event for sterling this week, with policymakers expected to raise interest rates for the fourth consecutive meeting, the first such run since 1997. The pound has weakened in recent weeks on expectations that the BoE may have to slow the pace of tightening as the central bank battles with above-target inflation and a cost-of-living crisis that is showing signs of weighing on economic activity. Sterling was up 0.1% against the U.S. dollar at $1.2532, after hitting its lowest level since July 2020 at $1.2412 last week. Immediate resistance can be seen at 1.2487(38.2%fib), an upside break can trigger rise towards 1.2660(11DMA).On the downside, immediate support is seen at 1.2456(23.6%fib), a break below could take the pair towards 1.23928(Lower BB).

USD/CHF: The dollar edge higher against Swiss franc on Wednesday as investors awaited the U.S. Federal Reserve's policy announcement later in the day. Investors expect the Fed to hike rates by half a percentage point on Wednesday, and to detail plans to reduce its $8.9 trillion balance sheet. The U.S. central bank raised its policy interest rate by 25 basis points in March. The Fed is set to release a policy statement at 1800 GMT, followed by Chair Jerome Powell’s news conference. Immediate resistance can be seen at  0.9825 (23.6 % fib), an upside break can trigger rise towards 0.9860(Higher BB).On the downside, immediate support is seen at 0.9771(5DMA), a break below could take the pair towards 0.9745(38.2 % fib ).

USD/JPY: The dollar edged slightly lower against yen on Wednesday ahead of the U.S. Federal Reserve's policy decision later in the day, with investors looking for clues on future interest rate hikes. The Fed is expected to raise rates by 50 basis points on Wednesday, and markets are pricing in an aggressive run of hikes as it tries to tame soaring inflation. The central bank is expected to raise its benchmark overnight interest rate by half a percentage point to help tame inflation, following a quarter-percentage-point rate increase in March, and announce plans for reducing its nearly $9 trillion in assets. Strong resistance can be seen at 130.54(23.6%fib), an upside break can trigger rise towards 131.53(Higher BB).On the downside, immediate support is seen at 129.18 (5DMA), a break below could take the pair towards 128.26(38.2%fib).

Equities Recap

European stocks dipped on Wednesday, weighed down by mixed earnings updates and nerves ahead of a policy decision from the U.S. Federal Reserve, which is expected to announce its biggest interest rate hike since 2000 to curb inflation.

At (GMT 14:01 ),UK's benchmark FTSE 100 was last trading down  at 0.30 percent, Germany's Dax up  by 0.02 percent, France’s CAC finished was down by 0.51 percent.

Commodities Recap

Gold prices steadied on Wednesday, a day after hitting an over two-month low, as investors awaited a policy decision by the U.S. Federal Reserve and cues on its future interest rate trajectory.

Spot gold was little changed at $1,868.66 per ounce by 0955 GMT. U.S. gold futures were flat at $1,870.30.

Oil prices jumped on Wednesday as the European Union, the world's largest trading bloc, spelled out plans to phase out imports of Russian oil, offsetting demand worries in top importer China.

Brent crude futures rose $3.76, or 3.6%, to $108.73 a barrel by 1353 GMT. West Texas Intermediate crude futures rose $3.93, or 3.8%, to $106.34 a barrel.

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