Europe Roundup: Sterling falls to two-month low as inflation pressures mount, European shares falls, Gold firms, Oil down nearly 3% as Russia downplays additional OPEC+ cuts-May 25th,2023

Posted at 25 May 2023 / Categories Market Roundups

Market Roundup

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

•German GDP (QoQ) (Q1) -0.3%, -0.1% forecast,-0.4% previous

•Sweden Apr Unemployment Rate 7.5% , 7.6% forecast, 7.7% previous

•German Jun  GfK   Consumer Climate -24.2, -24.0 forecast, -25.7 previous

•French May Business Survey  99, 101 forecast, 101 previous

•US Real Consumer Spending (Q1) 3.8%  ,3.7% forecast,1.0% previous

•US GDP (QoQ) (Q1) 1.3%, 1.1%   forecast, 2.6% previous

•US PCE Prices (Q1) 4.2%, 4.2% forecast, 3.7% previous

•US GDP Sales (Q1) 3.4%,3.4% forecast,1.1% previous

•US Core PCE Prices (Q1) 5.00%, 4.90% forecast,4.40% previous

•US GDP Price Index (QoQ) (Q1)   4.1%, 4.0% forecast, 3.9% previous

Looking ahead Economic Data(GMT)

•US Apr Pending Home Sales Index   78.9 forecast, 78.9 previous

 •US Apr Pending Home Sales (MoM)  0.0%, 0.5% forecast, -5.2% previous

Looking Events And Other Releases(GMT)

•No Events Ahead

Currency Forecast

EUR/USD: The euro fell on Thursday as Europe's largest economy Germany was confirmed to be in a recession, while the dollar hit a two-month peak, benefitting from safe-haven demand as worries mounted about a U.S. default. The latest sign of weakness came from Germany, where the economy contracted slightly in the first quarter, and so was in recession after negative growth in the fourth quarter of 2022. The euro slipped about 0.2%, enough to refresh a two-month low at $1.0715.Immediate resistance can be seen at 1.0762(38.2%fib), an upside break can trigger rise towards 1.0772(23.6%fib).On the downside, immediate support is seen at  1.0709 (50%fib), a break below could take the pair towards 1.0633(61.8%fib).

GBP/USD: The pound fell to its lowest level in almost two months on Thursday after an inflation report sowed doubts about the health of Britain’s economy. Data on Wednesday showed that Britain’s core inflation rate - which strips out volatile energy and food costs - rose to a 31-year high of 6.8% in April.The overall inflation rate fell to 8.7% from 10.1% in March, but economists expected a bigger fall to 8.2%.Sterling dropped to $1.2340 , the lowest since April 3. Immediate resistance can be seen at 1.2397 (5DMA), an upside break can trigger rise towards 1.2431 (23.6%fib).On the downside, immediate support is seen at 1.2312 (38.2%fib), a break below could take the pair towards 1.2289(Lower BB).

USD/CHF: The dollar initially gained against Swiss franc on Thursday  but gave up some ground  as investors awaited developments in the drawn-out debt ceiling negotiations in Washington. Negotiators for Democratic President Joe Biden and top congressional Republican Kevin McCarthy held what both sides called productive talks on Wednesday to try to reach a deal to raise the United States’ $31.4 trillion debt ceiling and avoid a catastrophic default. Immediate resistance can be seen at 0.9068(Daily high), an upside break can trigger rise towards 0.9094 (23.6%fib).On the downside, immediate support is seen at 0.9042(38.2%fib), a break below could take the pair towards 0.9016 (5DMA).

USD/JPY: The U.S. dollar   strengthened against Japan's yen on Thursday as investor concerns over the U.S. debt ceiling boosted the dollar. The White House and congressional Republicans are expected to resume negotiations on Thursday with as little as a week remaining until a potential economically catastrophic default. The dollar was up around 0.2% against a basket of global currencies after hitting a two-month high on safe-haven demand linked to mounting worries about a potentially disastrous U.S. default. Strong resistance can be seen at 140.02(23.6%fib) an upside break can trigger rise towards 140.76(Higher BB).On the downside, immediate support is seen 138.86(5DMA), a break below could take the pair towards 138.28(38.2%fib)

Equities Recap

European stocks steadied on Thursday after their worst two-day selloff since March, as investors balanced concerns over the U.S. debt ceiling standoff and a global economic slowdown with optimism from upbeat corporate earnings.

At (GMT 14:55),UK's benchmark FTSE 100 was last trading down  at 0.47 percent, Germany's Dax was down by 0.17 percent, France’s CAC was trading down by 0.19 percent.

Commodities Recap

Gold slid to its lowest in two months on Thursday as optimism around the U.S. debt ceiling talks lowered safe-haven demand for bullion and robust economic data fueled bets of another rate hike by the Federal Reserve.

Spot gold was 0.4% down at $1,949.69 per ounce by 10:10 a.m. EDT (1410 GMT), having hit its lowest since March 22. U.S. gold futures eased 0.7% to $1,950.20.

Oil prices fell on Thursday after Russian Deputy Prime Minister Alexander Novak played down the prospect of further OPEC+ production cuts at its meeting next week.

Brent crude futures were down $2.03, or 2.6%, to $76.33 a barrel by 1340 GMT. U.S. West Texas Intermediate crude (WTI) fell $2.10, or 2.8%, to $72.24.

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