Posted at 10 May 2022 / Categories Market Roundups
•Italian Mar Industrial Production (YoY) 3.0%,1.3% forecast,3.3% previous
•Italian Mar Industrial Production (MoM) 0.0% ,-1.9% forecast, 4.0% previous
•EU ZEW May Economic Sentiment 29.5,43.0 previous
•German May ZEW Economic Sentiment-34.3, -42.0 forecast ,-41.0 previous
Looking Ahead - Economic Data (GMT)
•12:55 US Redbook (YoY) 15.2% previous
•14:00 US IBD/TIPP Economic Optimism 45.5 previous
•16:00 US EIA Short-Term Energy Outlook
•17:00 US 3-Year Note Auction 2.738% previous
Looking Ahead - Economic events and other releases (GMT)
•12:30 US FOMC Member Bostic Speaks
•14:00 German Buba President Nagel Speaks
•17:00 US FOMC Member Kashkari Speaks
•17:00 US Fed Waller Speaks
•17:20 ECB's De Guindos Speaks
•19:00 US FOMC Member Mester Speak
•23:00 US FOMC Member Bostic Speaks
EUR/USD: The euro steadied against the U.S. dollar on Tuesday as aggressive repricing of European Central Bank monetary tightening expectations supported euro. Money markets are currently pricing 92 bps of ECB rate hikes by year-end, from around 95 bps on Monday. ECB dove de Guindos on April 20 said that the bank should end its Asset Purchase Programme in July and could raise interest rates that same month. Investors awaited data on German investor sentiment at 0900 GMT that analysts expect to slip further. Immediate resistance can be seen at 1.0557 (5DMA), an upside break can trigger rise towards 1.0597 (38.2%fib).On the downside, immediate support is seen at 1.0490(23.6%fib), a break below could take the pair towards 1.0422 (Lower BB).
GBP/USD: The British pound was little changed on Tuesday, pausing after a slide to its lowest levels in nearly two years on signs that a weakening economy will force the Bank of England to slow its interest-rate hiking cycle.At 0825 GMT, the pound was flat against the U.S. dollar at $1.2328, just above its lowest level since June 2020 of $1.2262 reached on Monday. On Thursday, the BoE raised its benchmark interest rate to 1.0% but said it saw the economy shrinking in 2023 and a near 1% fall in gross domestic product in the final quarter of 2022.Markets are currently pricing in a further 110 basis points of tightening from the BoE this year, taking the benchmark rate to just above 2.0%. Immediate resistance can be seen at 1.2405(38.2%fib), an upside break can trigger rise towards 1.2433(5DMA).On the downside, immediate support is seen at 1.2276 (23.6%fib), a break below could take the pair towards 1.2187(Lower BB).
USD/CHF: The dollar was little changed against Swiss franc on Tuesday as investors fretted about the toxic cocktail of rising interest rates and weaker economic growth. Growing fears of recession and a slowdown in China dragged on commodity-linked currencies and oil prices, though safety flows kept the dollar near 20-year highs. Growth worries resurfaced after central banks in the United States, Britain and Australia raised interest rates last week and investors girded for more tightening as policymakers fight soaring inflation. Immediate resistance can be seen at 0.9943(23.6 % fib), an upside break can trigger rise towards 0.9971(Higher BB).On the downside, immediate support is seen at 0.9882(Daily low), a break below could take the pair towards 0.9838(38.2 % fib ).
USD/JPY: The dollar edged lower against yen on Tuesday as investors wait for key U.S. inflation data that could impact the Federal Reserve’s monetary policy. The monthly CPI data will be closely watched for any impact it could have on the U.S. central bank’s rate-hike plans. Last week, the U.S. Federal Reserve raised its benchmark overnight interest rate by half-a-percentage point as it moves to unwind ultra-easy pandemic-era monetary policy and attempts to combat soaring inflation. Strong resistance can be seen at 131.44(23.6%fib), an upside break can trigger rise towards 131.95 (Higher BB).On the downside, immediate support is seen at 129.83(Daily low), a break below could take the pair towards 129.45(38.2%fib).
European stock indexes opened higher on Tuesday, with risk appetite showing some recovery after Monday's sharp falls, but analysts said fears over lower growth were still weighing on markets.
At (GMT 09:12),UK's benchmark FTSE 100 was last trading up at 0.91 percent, Germany's Dax up by 1.62 percent, France’s CAC finished was up by 1.28 percent.
Gold prices recovered on Tuesday as the dollar moved away from recent two-decade highs, rekindling demand for greenback-priced bullion while investors wait for key U.S. inflation data that could impact the Federal Reserve’s monetary policy.
Spot gold was up 0.3% at $1,859.00 per ounce by 0810 GMT. U.S. gold futures were little changed at $1,859.00.
Oil prices dropped more than 1% on Tuesday, extending the previous day's steep declines as coronavirus lockdowns in top oil importer China, a strong dollar and growing recession risks fed worries about the outlook for global demand.
Brent crude was down $1.19, or 1.1%, at $104.75 a barrel at 0607 GMT after slipping to as low as $103.19.
U.S. West Texas Intermediate crude fell $1.07, or 1%, to $102.02 a barrel after hitting an intraday low of $100.44.