Europe Roundup: Sterling logs a second week of gains as rate outlook heats up ,European shares flat,Gold eases, Oil price gains capped by demand fears-June 9th ,2023

Posted at 09 June 2023 / Categories Market Roundups

Market Roundup

• Italian Apr Industrial Production (YoY)  -7.2%, -4.1% forecast, -3.2% previous

• Italian Apr Italian Industrial Production (MoM)  -1.9%, 0.1% forecast, -0.6% previous

•Greek Apr Industrial Production (YoY)   4.2% ,  -0.2% previous

•Greek May HICP (YoY)  4.1%, 4.5% previous

Looking Ahead Economic Data(GMT)

•12:30 Canada May Employment Change  23.2K forecast, 41.4K previous

•12:30 Canada Capacity Utilization Rate (Q1) 82.2% forecast, 81.7% previous

•12:30 Canada May Unemployment Rate  5.1% forecast,5.0% previous

•12:30 Canada May Full Employment Change  -6.2K previous

•12:30 Canada May Participation Rate  65.6% forecast,65.6% previous

•12:30 Canada May Part Time Employment Change  47.6K previous

Looking  Ahead Events And Other Releases(GMT)

•No events ahead

Currency Forecast

EUR/USD: The euro traded in tight range against   dollar on Friday  as investors braced for a European Central Bank's policy meeting tilted on the hawkish side late next week. Analysts expect the ECB to raise rates by 25 basis points while being careful not to signal a pause in the tightening path. Such a move might lead markets to scale back their bets about future rate hikes, triggering an unwanted easing of financial conditions. The euro eased 0.2% to $1.0762 , backing off Thursday's two-week high. Immediate resistance can be seen at 1.0825(50%fib), an upside break can trigger rise towards 1.0870 (LowerBB).On the downside, immediate support is seen at  1.0755 (38.2%fib), a break below could take the pair towards 1.0732(5DMA).

GBP/USD: The pound headed for a second week of gains on Friday, boosted by the prospect of UK interest rates catching up with U.S. rates, as the Bank of England fights to bring down the highest inflation across leading economies Money markets are currently pricing in a peak of 5.5% for UK rates, up from 4.5% right now.U.S. rates, by contrast, are at 5.25%, which traders roughly believe is at, or close to, the peak. Another 100 basis points in rises from the BoE would erode the appeal of the dollar among yield-hungry investors. Sterling is on track for a weekly rise of 0.7%, on the heels of last week’s 0.8% gain. The pound was last down 0.1% against the dollar at $1.2541 .Immediate resistance can be seen at 1.2582 (23.6%fib), an upside break can trigger rise towards 1.2602(Higher BB).On the downside, immediate support is seen at 1.2484(5DMA), a break below could take the pair towards 1.2448(38.2%fib).

 USD/CHF: The dollar strengthened against Swiss franc on Friday,shrugging off some of the weakness that has set in this month as expectations have grown that the Federal Reserve may not raise interest rates again for some time. Focus now shifts to the U.S. consumer inflation report for May, due on June 13, a day before the Fed announces its policy decision. Markets are pricing in a 76% chance of the Fed standing pat next week, after having raised at every meeting since March 2022, while odds of a 25 bps rate hike in July were 52%, per the CME Fedwatch tool. Immediate resistance can be seen at 0.9047 (5DMA), an upside break can trigger rise towards 09108(38.2%fib).On the downside, immediate support is seen at 0.8989(23.6%fib), a break below could take the pair towards 0.8919( Lower BB).

USD/JPY: The U.S. dollar strengthened against Japanese yen on Friday after BOJ Governor Kazuo Ueda reiterated the central bank's resolve to keep monetary policy ultra-loose . The Bank of Japan (BOJ) is expected to maintain ultra-loose monetary policy next week and its forecast for a moderate economic recovery, as robust corporate and household spending cushion the blow from slowing overseas demand. The central bank also may signal that inflation is overshooting its forecasts, which would heighten the chance of an upgrade in its price projections at a quarterly review of its estimates due in July.Strong resistance can be seen at 139.51(5DMA) an upside break can trigger rise towards 140.18(23.6%fib).On the downside, immediate support is seen 138.88(Daily low), a break below could take the pair towards 138.23(38.2%fib)

Equities Recap

European shares dipped on Friday, rounding off a lacklustre week which saw investors step to the sidelines ahead of crucial updates from the U.S. Federal Reserve and the European Central Bank(ECB), while Croda slid on a tepid profit outlook.

At (GMT 11:54 ),UK's benchmark FTSE 100 was last trading down at 0.47 percent, Germany's Dax was down   by 0.28 percent, France’s CAC was trading down by 0.22 percent.

Commodities Recap

Gold eased on Friday on a stronger dollar, but held close to the previous session’s highs en route to a weekly gain helped by bets that the Federal Reserve could soon pause interest rate hikes.

Spot gold fell 0.3% to $1,962.34 per ounce by 5:52 a.m. ET (0952 GMT), but headed for a 0.8% weekly climb, having jumped about 1.5%.U.S. gold futures held steady at $1,978.20.

Oil prices rose on Friday and were broadly flat on the week as concern over oil demand growth was balanced by Saudi output cuts.

Brent crude futures rose 36 cents, or 0.5%, to $76.32 a barrel by 0932 GMT while U.S. West Texas Intermediate crude was up 34 cents, or 0.5%, at $71.63.

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