News

Europe Roundup: Sterling hits fresh highs vs dollar , European shares fall, Gold scales 1-week high, Oil rises on positive forecasts, slow U.S. output restart-23rd February 2021

Market Roundup

•German Labour Productivity -1.1%,4.0% previous

•UK Claimant Jan Count Change -20.0K, 35.0K forecast, 7.0K previous

•UK Dec Average Earnings ex Bonus 4.1%,4.0% forecast, 3.6% previous

•UK Dec Unemployment Rate 5.1%, 5.1% forecast, 5.0% previous

•UK Dec Average Earnings Index +Bonus 4.7%,4.1% forecast, 3.6% previous

•Swiss Jan PPI (YoY) -2.1%,-2.3% previous

•Swiss Jan PPI (MoM) 0.3%,0.5% previous

•Italian Dec Industrial Sales (MoM) 1.00%,-2.00% previous

•EU Jan Core CPI (YoY) 1.4%,1.4% forecast, 0.2% previous

•EU Jan CPI (MoM) 0.2%,0 .2% forecast, 0.3% previous

•EU CPI (YoY) 0.9%,0.9% forecast, -0.3% previous

•UK Feb CBI Distributive Trades Survey -45, -38 forecast, -50 previous

Looking Ahead – Economic Data (GMT)

•13:55 US Redbook (MoM) -0.9% previous

•13:55 US Redbook (YoY) 4.0% previous

•14:00 US Dec House Price Index (MoM) 1.0% previous

•14:00 US Dec House Price Index 310.1 previous

•15:00 US Dec S&P/CS HPI Composite – 20 s.a. (MoM) 1.3% forecast, 1.4% previous

•15:00 US Dec S&P/CS HPI Composite – 20 n.s.a. (YoY) 9.9% forecast,9.1% previous

•15:00 US Feb Richmond Manufacturing Shipments 10 previous

•15:00 US Feb CB Consumer Confidence 90.0forecast, 89.3 previous

•15:30 US Feb Dallas Fed Services Revenues 0.8 previous

Looking Ahead – Economic events and other releases (GMT)

•15:00 US Fed Chair Powell Testifies

• 17:30 Canada BoC Gov Council Member Macklem Speaks

Fx Beat

EUR/USD: The euro declined against dollar on Tuesday after the European Central Bank President Christine Lagarde on Monday signalled discomfort with the recent surge in yields .European Central Bank President Christine Lagarde said the bank was “closely monitoring” rising borrowing costs. Fed Chair Powell is expected to be equally reassuring on the central bank’s dovish stance when he gives his congressional testimony at 1500 GMT in Washington .Immediate resistance can be seen at 1.2172(50%fib), an upside break can trigger rise towards 1.223 (61.8%fib).On the downside, immediate support is seen at 1.2112(38.2%fib), a break below could take the pair towards 1.2029 (23.6%fib).

GBP/USD: Sterling edged higher against dollar on Tuesday after Prime Minister Boris Johnson set out a schedule for easing lockdown, while British finance minister Rishi Sunak added that more job support would be unveiled next week. The pound has strengthened almost 3% in February against the dollar as traders expect that Britain’s speedy vaccine roll out will help its economy rebound from the biggest contraction in 300 years. Sterling rose to $1.4098 versus the dollar, its highest level since April 2018. It was up 0.2% at $1.4082 at 12:30 GMT. Immediate resistance can be seen at 1.4075 (23.6%fib), an upside break can trigger rise towards 1.4100(Psychological level).On the downside, immediate support is seen at 1.4024(38.2%fib), a break below could take the pair towards 1.3980 (23.6%fib).

USD/CHF: The dollar strengthened against the Swiss franc on Tuesday as investors’ focus shifted to how U.S. Federal Reserve chief Jerome Powell might respond to resurgent inflation expectations. Analysts expect Powell, who testifies before Congress at 1500 GMT, to provide some reassurance that the Fed will tolerate higher inflation without rushing to raise rates.The dollar index was last at 90.143, up 0.1% on the day, having earlier fallen to 89.941, its weakest since Jan. 13.Immediate resistance can be seen at 0.9020(38.2%fib), an upside break can trigger rise towards 0.9056(23.6%fib).On the downside, immediate support is seen at 0.8988 (50%fib), a break below could take the pair towards 0.8959(61.8%fib).

USD/JPY: The dollar strengthened against the yen on Tuesday ahead of Federal Reserve chief Jerome Powell’s testimony to the U.S. Congress. Investors expect Fed chief Powell, who gives his testimony before Congress at 1500 GMT, to reassure the central bank will tolerate higher inflation without immediately raising rates, which could calm bond markets and weigh on the dollar. Strong resistance can be seen at 105.25 (38.2%fib), an upside break can trigger rise towards 105.68(23.6%fib).On the downside, immediate support is seen at 104.90 (Daily low), a break below could take the pair towards 104.80 (61.8%fib).

Equities Recap

European shares reversed early gains to trade lower on Tuesday as mixed corporate earnings updates overshadowed a boost from strong commodity prices, while British bank HSBC fell after abandoning its long-term profitability targets.

At (GMT 1300),UK’s benchmark FTSE 100 was last trading down at 0.01 percent, Germany’s Dax was down by 0.92 percent, France’s CAC was last up by 0.09 percent.

Commodities Recap

Gold climbed to a one-week high on Tuesday, bolstered by a weaker dollar and a retreat in U.S. Treasury yields, while concerns over rising inflation further boosted bullion’s appeal.

Spot gold was up 0.1% at $1,810.71 per ounce by 0706 GMT, after hitting its highest since Feb. 16 at $1,815.63 earlier in the session. U.S. gold futures gained 0.1% to $1,810.20.

Oil prices rose on Tuesday, underpinned by the likely easing of COVID-19 lockdowns around the world, positive economic forecasts and lower output as U.S. supplies were slow to return after a deep freeze in Texas shut down crude production.

Brent crude was up 87 cents, or 1.3%, at $66.11 a barrel by 0945 GMT, and U.S. crude rose 68 cents, or 1.1%, to $62.38 a barrel.


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