Europe Roundup: Euro slips from one-month high vs dollar, Gold falls, Oil prices edge higher on tight supply, firmer demand expectations-May 25th,2022

Posted at 25 May 2022 / Categories Market Roundups

Market Roundup

•Sweden Apr Unemployment Rate 8.2%,8.2% previous

• German Jun GfK  Consumer Climate -26.0, -26.0 forecast, -26.5 previous

•German GDP (YoY) (Q1) 4.0%, 4.0% forecast, 1.8% previous

•German GDP (QoQ) (Q1) 0.2%, 0.2%    forecast,-0.3% previous

•Swiss May ZEW Expectations-52.6, -51.6 previous

Looking Ahead - Economic Data (GMT)

•12:30 US Apr Goods Orders Non Defense Ex Air (MoM) 0.5% forecast, 0.9% previous   

•12:30 Canada Profits (QoQ) 3.8% previous

•12:30 US Apr Core Durable Goods Orders (MoM)  0.6% forecast,1.2% previous   

•12:30 US Apr Durable Goods Orders (MoM)  0.6% forecast, 0.8% previous   

•12:30 US Apr Durables Excluding Defense (MoM) 1.0%   forecast,1.4% previous   

•14:30 US Cushing Crude Oil Inventories -2.403M previous

•14:30 US Crude Oil Inventories -0.737M forecast, -3.394M previous

Looking Ahead - Economic events and other releases (GMT)

•16:00 German Buba Beermann Speaks               
•15:15 UK MPC Member Tenreyro Speaks

•16:15 US FOMC Member Brainard Speaks         

•18:00 US FOMC Meeting Minutes


EUR/USD: The euro declined  on Wednesday as the dollar bounced back ahead of the release of U.S. Federal Reserve minutes of its last policy meeting. The dollar index   fell more than 1% over the first two days of this week as traders positioned for a slightly less aggressive path of Federal Reserve rate hikes, but it was more than 0.2% stronger early on Wednesday. The FOMC is expected to release the minutes from its May 3–4 policy meeting at 1800 GMT. The minutes of the Fed's last rate-setting meeting will provide further clues about the policy outlook, when they are released later in the day. Immediate resistance can be seen at 1.0742(38.2%fib), an upside break can trigger rise towards 1.0765 (Higher BB).On the downside, immediate support is seen at 1.0663(23.6%fib), a break below could take the pair towards 1.0548 (21DMA).

GBP/USD: The pound declined against dollar on Wednesday a day after plunging following weak data and ahead of the expected release of a report into lockdown-breaking parties at Downing Street. Senior civil servant Sue Gray is expected to publish the report on Wednesday, heaping more pressure on Prime Minister Boris Johnson as the country struggles with a slowing economy and decades-high inflation. Data on Tuesday showed a sharp slowdown in British business activity in May, with S&P Global’s flash Composite Purchasing Managers’ Index slumping to a 15-month low, adding to fears that the economy will slip into recession. At 0814 GMT, the pound was down against the dollar at $1.2508 .Immediate resistance can be seen at 1.2611(38.2%fib),an upside break can trigger rise towards 1.2719(50%fib).On the downside, immediate support is seen at 1.2504 (23.6%fib), a break below could take the pair towards 1.2439 (21DMA).

USD/CHF: The dollar strengthened against the Swiss franc on Wednesday as dollar gained ahead of Federal Reserve meeting minutes. The U.S. Federal Reserve has vowed to act aggressively by hiking the cost of borrowing and minutes from its most recent meeting, due later, will be parsed for clues regarding the speed and extent of those actions. Investors currently expect a series of 50-basis-point rate hikes over the next several months, stoking fears that it could easily bring the world’s largest economy to a standstill. The U.S. dollar index   which measures the currency against six major rivals - rebounded 0.16% to 101.92, a level not seen since April 26.Immediate resistance can be seen at 0.9642 (38.2%fib), an upside break can trigger rise towards 0.9670 (5DMA).On the downside, immediate support is seen at 0.9546 (50% fib), a break below could take the pair towards 0.9498 (Lower BB ).

USD/JPY: The dollar edged higher against the Japanese yen on Wednesday as greenback snapped a two-day losing streak   as Treasury yields paused recent falls. U.S. 10-year Treasury yields, which hit 3-1/2-year highs earlier in May, have since fallen some 40 basis points . They slipped another 2 bps on Wednesday but two-year yields were steady on the day. The dollar has fallen around 3% after hitting two-decade highs earlier this month but bounced 0.4% off one-month lows reached earlier this week. The dollar was 0.46 percent  higher versus the Japanese yen at 127.00.Strong resistance can be seen at 127.38(5DMA), an upside break can trigger rise towards 128.47(23.6%fibOn the downside, immediate support is seen at 126.33 (50DMA), a break below could take the pair towards 125.00(Psychological level).

Equities Recap

European shares eked out gains on Wednesday, lifted by resource-linked stocks and banks, with investors watching for updates from central banks on monetary policy tightening amid rising concerns of an economic slowdown.

At (GMT 09:56 ),UK's benchmark FTSE 100 was last trading up at 0.55 percent, Germany's Dax was up by 0.24 percent, France’s CAC was last up by 0.21 percent.

Commodities Recap

Gold prices fell on Wednesday as the dollar firmed in the run-up to minutes from the U.S. Federal Reserve’s May policy meeting, which could provide cues on its policy tightening path.

Spot gold was down 0.4% at $1,859.39 per ounce by 0820 GMT, after rising to a two-week high of $1,869.49 on Tuesday. U.S. gold futures dropped 0.4% to $1,857.80.

Oil prices rose on Wednesday, buoyed by tight supplies and the prospect of rising demand from the upcoming start of the summer driving season in the United States, the world's biggest crude consumer.

Brent crude futures for July rose 44cents, or 0.4%, to $114.00 a barrel by 0619 GMT. Brent futures gained 0.1% on Tuesday and are up for a fifth day.

U.S. West Texas Intermediate (WTI) crude futures for July delivery rose 51 cents, or 0.5%, to $110.28 a barrel. The contract settled down 52 cents on Tuesday.

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