Europe Roundup: Pound heads for biggest weekly gain in six months, European shares gains, Gold gains, Oil prices rise after U.S. debt deal, all eyes on OPEC meeting-June 2nd,2023

Posted at 02 June 2023 / Categories Market Roundups

Market Roundup

•French Apr Industrial Production (MoM) 0.8%, 0.3% forecast, -1.1% previous

•Spanish Unemployment Change -49.3K , -40.1K forecast,-73.9K previous

•German Car Registration (YoY)                42.50%, 0.40% previous

•German May Car Car Registration (MoM)   3.70%,-23.00% previous

•Irish GNP (YoY) (Q1) -3.7%, 4.7% previous

Looking Ahead Economic Data(GMT)

•12:30 US May  U6 Unemployment Rate  6.6% forecast,6.6% previous

•12:30 US  May Participation Rate  62.5% forecast, 62.6% previous

•12:30 US May Average Hourly Earnings (MoM)  0.4% forecast, 0.5% previous

•12:30 US May Average Hourly Earnings (YoY) (YoY)  4.3% forecast, 4.4% previous

•12:30 US May Nonfarm Payrolls  180K forecast, 253K previous

•12:30 US May Government Payrolls  23.0K previous

•12:30 US May Private Nonfarm Payrolls  160K forecast, 230K previous

•12:30 US May Average Weekly Hours  34.4 forecast,34.4 previous

•12:30 US May  Manufacturing Payrolls 8K forecast,11K previous

•12:30 US May Unemployment Rate 3.5% forecast,3.4% previous

•17:00 U.S. Baker Hughes Oil Rig Count  570 previous

•17:00 U.S. Baker Hughes Total Rig Count 711 previous

Looking Ahead Events And Other Releases(GMT)

•No significant events

Currency Forecast

EUR/USD: The euro edged higher against   on Friday as dollar dipped on growing expectations that the U.S. Fed will stand still on interest rates this month. U.S. manufacturing data and comments by Fed officials reinforced expectations that the Fed would skip a rate hike at its June policy meeting.The dollar was down around 0.05% against a basket of global currencies on Friday.Markets are now pricing in a 20% chance of the Fed hiking by 25 basis points compared to a 50% chance a week earlier, according to the CME FedWatch tool. Immediate resistance can be seen at 1.0791(38.2%fib), an upside break can trigger rise towards 1.0862 (23.6%fib).On the downside, immediate support is seen at  1.0732(50%fib), a break below could take the pair towards 1.0676(61.8%fib).

GBP/USD: Sterling headed for its biggest one-week rally against the dollar in six months on Friday, as U.S. interest rates looked increasingly likely to plateau sooner than UK rates. With the all-important monthly U.S. employment report due later in the day, activity in the currency market was subdued. The pound has gained 1.5% against the dollar this week, the most since early December, and nearly 1.1% against the euro - which would be its largest weekly increase in nearly four months. Immediate resistance can be seen at 1.2572 (23.6%fib), an upside break can trigger rise towards 1.2638 (11th May).On the downside, immediate support is seen at 1.2507(38.2%fib), a break below could take the pair towards 1.2454(50%fib).

 USD/CHF: The dollar strengthened against Swiss franc on Friday as markets awaited on U.S. jobs data. Markets are   focused on U.S. jobs data due 0830 EST (1230 GMT), the most significant macroeconomic release of the week, for more cues on the Federal Reserve's rate hike path. The U.S. Labor Department's employment report is likely to show nonfarm payrolls increased by 190,000 jobs last month after rising 253,000 in April, according to a survey of economists. Immediate resistance can be seen at 0.9144(38.2%fib), an upside break can trigger rise towards 09155(Higher BB).On the downside, immediate support is seen at 0.9034 (38.2%fib), a break below could take the pair towards 0.9033(5DMA).

USD/JPY: The U.S. dollar was little changed against Japanese yen on Friday as  the view took hold among investors that the Federal Reserve will forgo an interest rate hike this month .Some softness in U.S. manufacturing data overnight supported the case for a pause, although jobs figures continue to print hot, putting even more focus than usual on the monthly non-farm payrolls report at 1230 GMT.Money markets are pricing in a roughly 29% chance of a June hike, down from near 70% earlier in the week. Economists polled  expect non-farm payrolls to have increased by 190,000 in May, from April's 253,000 rise. Strong resistance can be seen at 139.44(5DMA) an upside break can trigger rise towards 139.86(23.6%fib).On the downside, immediate support is seen 138.44(38.2%fib), a break below could take the pair towards 136.94(50%fib)

Equities Recap

European shares rose on Friday, with real estate and mining stocks in the lead as investors took comfort from the passing of the U.S. debt ceiling bill and hints that the Federal Reserve could pause its interest rate hiking cycle later this month.

At (GMT 12:24),UK's benchmark FTSE 100 was last trading up at 0.94 percent, Germany's Dax was down  by 1.12 percent, France’s CAC was trading up by 1.20 percent.

Commodities Recap

Gold prices were on track on Friday for their biggest weekly rise since early April, buoyed by hopes the U.S. Federal Reserve would not raise interest rates at its policy meeting this month, which also weighed on the dollar and bond yields.

Spot gold was up 0.1% to $1,980.49 per ounce at 1005 GMT. U.S. gold futures were up 0.1% to $1,997.40.

Oil prices rose on Friday after a U.S. debt ceiling deal averted a default in the world's biggest oil consumer, while attention turned to a meeting of OPEC ministers and their allies at the weekend.

Brent crude futures were up $1.21, or 1.6% to $75.49 a barrel by 1134 GMT, while U.S. West Texas Intermediate crude (WTI) was up $1.19, or 1.7%, at $71.29. Both contracts were headed for their first weekly loss in three weeks.

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