Europe Roundup: Sterling erases post-BoE gains as Omicron weighs, European shares dips, Gold firms, Oil prices slump on Omicron and growth fears-December 20th,2021

Posted at 20 December 2021 / Categories Market Roundups

Market Roundup

•EU  Current Account n.s.a 20..5B, 26.9B previous           

•EU  Current Account 18.1B, 18.7B previous

•Belgium Dec Consumer Confidence -4,  1 previous

Looking Ahead - Economic Data (GMT) 

•14:00 French 12-Month BTF Auction -0.644% previous

•14:00 French 3-Month BTF Auction -0.764% previous

•14:00 French 6-Month BTF Auction -0.675% previous

•15:00 US Nov Leading Index (MoM)  0.8% ,0.9% previous

•16:30 US 3-Month Bill Auction 0.055% previous

Looking Ahead - Economic events and other releases (GMT)

•No significant events

Fx Beat 

EUR/USD: The euro edged higher against dollar on Monday as surging Omicron COVID-19 cases triggered tighter curbs in Europe and U.S. growth prospects dimmed after a $1.75 trillion domestic investment bill suffered a potentially fatal blow. The spread of the Omicron variant saw the Netherlands go into lockdown on Sunday and put pressure on others to follow, though the United States seemed set to remain open. The euro was last up 0.27% at $1.1270 . Immediate resistance can be seen at 1.1267 (38.2%fib), an upside break can trigger rise towards 1.1284 (21 DMA).On the downside, immediate support is seen at 1.1208 (Lower BB), a break below could take the pair towards 1.1173 (23.6%fib).

GBP/USD: The British pound slipped to a three-day low on Monday, nearing $1.32 versus the greenback as a broad risk-off mood swept through financial markets. Growing doubts about U.S. President Biden’s infrastructure program to see the light of day due to Democrat Joe Manchin’s ‘no’ is prompting a rethink about U.S. growth forecasts for 2022 while surging Omicron cases in Europe are driving worries of potential lockdowns. At current levels, the pound has erased all its gains sustained on the back of the Bank of England unexpectedly raising interest rates last week. Immediate resistance can be seen at 1.3244 (Daily high), an upside break can trigger rise towards 1.3259 (38.2%fib).On the downside, immediate support is seen at 1.3168(23.6%fib), a break below could take the pair towards 1.3148 (Lower BB).

USD/CHF: The dollar strengthened against the Swiss franc on Monday as talk of interest rate hikes by central bankers and concerns about the spread of Omicron cases boosted dollar. U.S. Federal Reserve officials talked about raising rates as soon as March and starting to run down the central bank's balance sheet in mid-2022. The greenback, which tends to attract demand as a safe haven, touched its highest since Dec. 15 against the euro, sterling and the swiss franc. Immediate resistance can be seen at 0.9254 (23.6%fib), an upside break can trigger rise towards 0.9295 (15th Dec).On the downside, immediate support is seen at 0.9288(11DMA), a break below could take the pair towards 0.9208 (38.2%fib).

USD/JPY: The dollar edged lower against the Japanese yen on Monday as investors favoured safe-haven yen  on concerns further curbs could be imposed in Europe to contain the Omicron variants. With last week's slew of major central bank meetings now out of the way, investors turned their focus to the rapid spread of the Omicron variant. Omicron infections are multiplying swiftly throughout Europe and the United States, every 3 days in London and somewhere else and taking a heavy toll on economic markets which worry the effect on the worldwide economic recovery. Strong resistance can be seen at 113.90 (5 DMA), an upside break can trigger rise towards 113.88 (23.6%fib).On the downside, immediate support is seen at 113.26 (38.2%fib), a break below could take the pair towards 112.78 (38.2%fib).

Equities Recap

European stocks fell more than 2% on Monday amid a global sell-off in equities, with investors fretting over the spectre of tighter pandemic curbs hitting the global economy as cases of the Omicron COVID-19 variant surge.      

At (GMT 10:51),UK's benchmark FTSE 100 was last trading lower at 1.12 percent, Germany's Dax was down by 1.93 percent, France’s CAC was last down by 1.13 percent.

Commodities Recap

Gold prices edged higher on Monday, hovering near a three-week high hit last week, as fears over the rapidly spreading Omicron coronavirus variant boosted the metal's safe-haven appeal.

Spot gold   rose 0.2% to $1,801.21 per ounce by 0412 GMT, while U.S. gold futures   fell 0.2% to $1,802.00. On Friday, bullion prices had hit their highest since Nov. 26.

Oil prices swung lower amid concerns the spread of the Omicron variant would crimp demand for fuel and signs of improving supply.

Brent fell 3.2% to $71.16 a barrel, while U.S. crude lost 3.6% to $68.30 per barrel.

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