Europe roundup: Euro gains as dollar plunges ahead of US inflation data, European stocks gain, gold rallies, oil rises on impending Russian oil ban in the EU, gas disruption – 11 May 2022
• German April CPI (monthly) 0.8%, forecast 0.8%, previous 2.5
• German HICP for April (annual) 7.8%, 7.8% forecast, 7.6% previous
• German April CPI (Annual) 7.4%, 7.4% forecast, 7.3% previous
Future Outlook – Economic Data (GMT)
•12:30 CPI index for April in the United States, its previous 287.71
•12:30 US April Actual Earnings (Month) -0.6% forecast, -1.1% previous
•12:30 US Apr CPI, nos (monthly) 1.34% previous
•12:30 US Apr CPI (YoY) 8.1% forecast, 8.5% previous
•12:30 US Apr Core CPI (MoM) 0.4% forecast, 0.3% prior
•12:30 US Apr Core CPI (YoY) 6.0% forecast, 6.5% prior
•12:30 a.m. US April CPI (monthly) 0.2% forecast, 1.2% previous
• 12:30 p.m. US Cushing Crude Oil Inventories 1.379M previous
• 12:30 p.m. Crude oil inventories in the United States -0.457 M forecast, 1.302 M previous
•15:00 United States Apr Cleveland CPI (Monthly) 0.5% previous
Future Outlook – Economic Events and Other Releases (GMT)
• No significant event
EUR/USD: The euro stabilized against the US dollar on Wednesday ahead of much-anticipated US inflation data that will offer a guide to how aggressively the Federal Reserve will raise rates. The euro rose 0.24% to $1.05560, having mostly traded sideways since hitting a more than five-year low of $1.04695 late last month. The common currency remains under pressure from the bullish dollar as well as fears that the war in Ukraine and rising energy prices could tip the eurozone into recession later this year. Immediate resistance can be seen at 1.0557 (5DMA), a break up can trigger a 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 pound strengthened on Wednesday as the dollar fell as investors awaited monthly US inflation data that could provide clues to the Federal Reserve’s monetary policy stance. Data on consumer prices in the United States, due at 12:30 GMT, could indicate whether the Fed will raise rates even more aggressively to fight inflation. Last week, the Fed raised its overnight interbank lending target by half a percentage point, and Chairman Jerome Powell said two more such hikes were likely at the bank’s upcoming policy meetings. Central American. There has also been speculation in the markets that the Fed will have to make a massive 75 basis point hike at a meeting. The pound rose 0.20% to $1.2360 after hitting a 22-month low of $1.2262 earlier in the week. Immediate resistance can be seen at 1.2391 (38.2% fib), a break up can trigger a rise towards 1.2433 (5DMA). On the downside, immediate support is seen at 1.2269 (23.6% fib), a break below could take the pair towards 1.2187 (BB lower).
USD/CHF: The dollar fell against the Swiss franc on Wednesday as investors awaited fresh US inflation data to anticipate how aggressively the Federal Reserve will need to tighten monetary policy to contain rising prices. The dollar index, which measures the greenback against six major peers, fell 0.3% to 103.65, below the two-decade high of 104.19 hit earlier this week. The Fed raised interest rates by 50 basis points last week and Chairman Jerome Powell said two more such hikes are likely at upcoming policy meetings at the US central bank. Immediate resistance can be seen at 0.9968 (23.6% fib), a break up can trigger a rise towards 1.002 (BB upper). On the downside, immediate support is seen at 0.9871 (daily low), a break below could take the pair towards 0.9823. (38.2% fiber).
USD/JPY: The dollar fell slightly against the yen on Wednesday as investors await key US inflation data that could impact the Federal Reserve’s monetary policy. Data on consumer prices in the United States, due at 12:30 GMT, could indicate whether the Fed will raise rates even more aggressively to fight inflation. Monthly CPI data will be watched closely for any impact it may have on the US central bank’s rate hike plans. Last week, the US Federal Reserve raised its benchmark overnight interest rate by half a percentage point as it struggles to unwind the ultra-loose monetary policy of the era of the pandemic and tries to fight against soaring inflation. Strong resistance can be seen at 130.65 (23.6% fib), a break up can trigger a move higher towards 131.88 (BB upper). On the downside, immediate support is seen at 128.78 (daily low), a break below could take the pair towards 128.15 (38.2% fiber).
Summary of actions
European stocks extended their rebound on Wednesday ahead of US inflation data that will offer a guide to how aggressively the Federal Reserve will raise rates.
At (09:32 GMT), Britain’s benchmark FTSE 100 last traded at 1.14%, Germany’s Dax up 0.99%, France’s CAC ended up 1.80% .
Summary of raw materials
Gold prices recovered from a three-month low on Wednesday as dollar and Treasury yields weakened, ahead of key monthly inflation data in the United States that could influence the direction of the Federal Reserve monetary policy and impact bullion demand.
Spot gold rose 0.6% to $1,849.245 an ounce, at 0729 GMT, after hitting its lowest level since Feb. 11 earlier in the session. US gold futures firmed 0.2% to $1,846.40.
Oil rose on Wednesday after plunging nearly 10% in the past two sessions, buoyed by supply issues as the European Union scrambles to drum up support for a Russian oil embargo and that Russian gas flows to Europe via a key transit point in Ukraine have dried up.
Brent crude rose $2.86, or 2.8%, to $105.32 a barrel at 0815 GMT, while US West Texas Intermediate crude climbed $2.53, or 2.5 %, at $102.29.