News

Europe Roundup: Sterling holds above $1.36 after UK GDP data, European stocks gain, Gold gains, Oil falls on concerns of faltering economic growth to hit demand-October 13th, 2021

Posted at 13 October 2021 / Categories Market Roundups


Market Roundup

•UK Index of Services 3.7% ,4.5% previous

•UK GDP (YoY) 6.9% ,6.7%,7.5% previous

•UK GDP (MoM) 0.4% ,0.5% forecast,0.1% previous

•UK Monthly GDP 3M/3M Change 2.9%, 3.0% forecast, 3.6% previous

•UK Aug Industrial Production (MoM)  0.8% ,0.2% forecast, 1.2% previous

•UK Aug Trade Balance Non-EU -8.40B, -6.99B previous

•UK Aug Trade Balance  -14.93B ,-12.00B forecast, -12.71B previous

•UK Aug Manufacturing Production (MoM ) 0.5% ,0.1% forecast, 0.2% previous

•German Sep CPI (MoM ) 0.0% ,0.0% forecast, 0.0% previous

•EU Aug Industrial Production (MoM )-1.6% ,-1.6% forecast, 1.5% previous

•EU Aug Industrial Production (YoY) 5.1%, 4.7% forecast, 7.7% previous

Looking Ahead Economic Data (GMT)

•12:30 US Sep Real Earnings (MoM)  0.3% previous

•12:30 US Sep CPI Index, s.a  273.01 previous

•12:30 US Sep CPI, n.s.a (MoM)  0.21% previous

•12:30 US Sep Core CPI (MoM)  0.2% forecast, 0.1% previous

•12:30 US Sep Core CPI (YoY)  4.0% forecast, 4.0% previous

•13:00 US Sep CPI (MoM)  0.3% forecast, 0.3% previous

•14:30 UK NIESR Monthly GDP Tracker 2.4% pre               

•15:00 US Cleveland Sep CPI (MoM) 0.3% previous

•18:00 US Federal Budget Balance  -171.0B previous

Looking Ahead - Events, Other Releases (GMT)

•14:30 UK BoE MPC Member Cunliffe Speaks

• 18:00 US FOMC Meeting Minutes

•20:30 FOMC Member Brainard Speaks

Fxbeat

EUR/USD: The euro strengthened   on Wednesday as dollar dipped ahead of U.S. inflation data that will shed further light on the Federal Reserve’s likely monetary policy path.Consumer prices are expected to have risen 5.3% in September , unchanged from August. Elevated inflation levels coupled with a spike in energy prices have spooked investors, and the data due at 1230 GMT will also be the last inflation number the Fed will have ahead of its November meeting, where investors expect it may announce a start to tapering its bond purchases. Immediate resistance can be seen at 1.1553 (50%fib), an upside break can trigger rise towards 1.1571(9DMA).On the downside, immediate support is seen at 1.1522 (38.2%fib), a break below could take the pair towards 1.1485 (23.6%fib).

GBP/USD: Sterling strengthened against dollar on Wednesday as traders assessed that data showing the British economy grew slightly below consensus in August was not enough to dent expectations the Bank of England (BoE) will increase rates. Britain’s economy grew 0.4% in August, leaving it just 0.8% smaller than it was in February 2020, the Office for National Statistics said. Economists polled by Reuters had forecast monthly gross domestic product growth of 0.5% for August. At 0825 GMT, sterling rose 0.3% versus the dollar to $1.3635. Against the euro, it edged 0.1% higher at 84.75, not far from a two-month high touched this week. Immediate resistance can be seen at 1.3628(38.2%fib), an upside break can trigger rise towards 1.3695(50%fib).On the downside, immediate support is seen at 1.3571(9DMA), a break below could take the pair towards 1.3543(23.6%fib).

USD/CHF: The dollar dipped against Swiss franc on Wednesday as mood was dampened by inflation worries ahead of U.S. consumer price data later on Wednesday. September U.S. CPI is forecast to show a monthly gain of 0.3. Minutes of the U.S. Federal Reserve’s September policy meeting are also due later. The dollar fell 0.2% against an index of currencies after hitting a one-year high in the previous session on rising expectations the Fed will announce a tapering of stimulus next month, with interest rate hikes following next year. Immediate resistance can be seen at 0.9317(23.6%fib), an upside break can trigger rise towards 0.9332(Higher BB).On the downside, immediate support is seen at 0.9287(9DMA), a break below could take the pair towards 0.9259(38.2%fib).

USD/JPY: The dollar held near three year high against yen on Wednesday amid rising expectations the Federal Reserve will announce a tapering of stimulus next month, potentially following with interest rate hikes by mid-2022. Three Fed policymakers said on Tuesday that the U.S. economy has healed enough to begin to scale back the central bank’s asset-purchase programme, including Vice Chair Richard Clarida. Money markets now price about a 50-50 chance of a rate increase by July. The dollar steadied at 113.58 yen after hitting its highest in nearly three years against the Japanese currency on Wednesday. Strong resistance can be seen at 113.60(Daily high), an upside break can trigger rise towards 114.00(Psychological level).On the downside, immediate support is seen at 113.26(38.2%fib), a break below could take the pair towards 112.80(50%fib).

Equities Recap

European stocks recouped early losses on Wednesday as upbeat earnings forecast from German software group SAP and robust quarterly sales for French luxury goods maker LVMH helped soothe worries about inflation.

At (GMT 10:00 ),UK's benchmark FTSE 100 was last trading down at 0.20 percent, Germany's Dax was up by 0.70 percent, France’s CAC   was last up by 0.30 percent.

Commodities Recap

Gold prices rose on Wednesday, boosted by concerns of an economic hit from soaring energy prices and a slight retreat in the dollar, as investors braced for U.S. inflation data.

Spot gold rose 0.4% to $1,767.08 per ounce by 0908 GMT, while U.S. gold futures were up 0.5% at $1,767.10.

Oil prices edged down on Wednesday on concerns that oil demand growth will fall as major economies suffer through inflation and supply chain issues though surging prices for power generation fuel such as coal and natural gas limited losses.

Brent crude futures fell 24 cents, or 0.2%, to $83.18 a barrel at 0830 GMT. U.S. West Texas Intermediate (WTI) crude futures fell 23 cents or 0.2% to $80.41 a barrel.


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