News

Europe Roundup: Sterling slips as BoE delivers big rate hike but warns of long recession,European shares gains, Gold gains over 1%, Oil prices stabilize after drop to near 6-month low-August 4th,2022

Posted at 04 August 2022 / Categories Market Roundups


Market Roundup

•German Jun Factory Orders (MoM)  -0.4%, -0.8%forecast, 0.1% previous

•German Jul IHS S&P Global Construction PMI 43.7 forecast, 45.9 previous

•UK Jul Construction PMI 48.9,52.0 forecast, 52.6 previous

•UK Aug BoE MPC vote unchanged   0, 0 forecast, 0 previous

•UK Aug BoE MPC vote cut  0,0 forecast,0 previous

•UK Aug BoE Interest Rate Decision  1.75%, 1.75% forecast,1.25% previous

•UK Aug BoE MPC vote hike9,9 forecast,9 previous

•UK Jul Challenger Job Cuts  25.810K, 32.517K previous

Looking Ahead - Economic Data (GMT)

• 12:30 US Imports 341.40B previous

•12:30  US Exports 255.90B previous

•12:30  US Continuing Jobless Claims 1,370K forecast, 1,359K previous

•12:30  US Initial Jobless Claims 259K forecast, 256K previous

•12:30  US Jobless Claims 4-Week Avg. 249.25K previous

•12:30 Canada Jun Building Permits (MoM) -1.5% forecast, 2.3% previous

•12:30  US Jun Trade Balance -80.10B forecast, -85.60B previous

•12:30  US Jun Imports  63.11B previous

•12:30  US Jun Trade Balance 4.80B forecast, 5.32B previous

•15:30 US  8-Week Bill Auction  2.210% previous

• 15:30 US  4-Week Bill Auction  2.140% previous

Looking Ahead - Economic events and other releases (GMT)

•No significant events

Fxbeat

EUR/USD: The euro edged lower on Thursday after the Bank of England (BoE) raised rates by 50 basis points, with investors assessing whether the euro zone market is fairly pricing the European Central Bank’s (ECB) future rate hike path. Hawkish comments from U.S. Federal Reserve officials returned investors’ attention to further monetary tightening on Wednesday, boosting euro, but recession fears are capping a potential further rise. The 50-basis-point increase from the BoE had been expected by most economists in a   poll as central banks around the world scramble to contain the surge in prices. Immediate resistance can be seen at 1.0252(38.2%fib), an upside break can trigger rise towards 1.0292(Higher BB).On the downside, immediate support is seen at 1.0157(21DMA), a break below could take the pair towards 1.0095(23.6%fib).

GBP/USD: Sterling fell on Thursday after the Bank of England followed its counterparts in the United States and euro zone with a hefty hike in interest rates to quell inflation, saying Britain faces a lengthy recession. As widely expected, the BoE increased rates by 50 basis points to 1.75%, its sixth increase since December but the biggest since 1995.he UK economy would begin to shrink in the final quarter of 2022 and contract throughout next year, making it the longest recession since after the global financial crisis, the central bank said. Sterling was down 0.2% at $1.2071 after being slightly firmer ahead of the BoE announcement.Immediate resistance can be seen at 1.2190(38.2%fib), an upside break can trigger rise towards 1.2258(Higher BB).On the downside, immediate support is seen at 1.2066(23.6%fib),a break below could take the pair towards 1.2023(21DMA).

 USD/CHF: The dollar edged lower against the Swiss franc on Thursday as the positive impact of hawkish Federal Reserve comments faded and investors waited for more signs on the data front to confirm that more large rate hikes to curb inflation were coming. Fed officials have continued to push back against the perception that U.S. interest rates were close to peaking. San Francisco Fed President Mary Daly and Minneapolis Fed President Neel Kashkari voiced their determination overnight to rein in high inflation. But the impact of the hawkish rhetoric on the dollar appeared to be fading, with the currency in a more defensive mood as the London session wore on. Immediate resistance can be seen at 0.9655(23.6%fib), an upside break can trigger rise towards 0.9670(21DMA).On the downside, immediate support is seen at 0.9567(38.2%fib), a break below could take the pair towards 0.9492 (50%fib).

USD/JPY: The dollar dipped against yen on Thursday ahead of a key U.S. jobs report that could influence the Federal Reserve’s policy stance. The dollar hovered near its highest this week after Federal Reserve officials continued to stress that policy tightening is far from over. However, Treasury yields remained down from two-week highs as investors stayed sidelined ahead of employment data this week that will guide the path of interest rates.Against Japan’s currency, which is extremely sensitive to U.S. yields, the buck retreated 0.24% to 133.62 yen, after reaching 134.55 overnight.. Strong resistance can be seen at 134.41 (23.6%fib), an upside break can trigger rise towards 135.00(Psychological level).On the downside, immediate support is seen at 132.88 (38.2%fib), a break below could take the pair towards 131.99 (Lower BB).

Equities Recap

European shares edged up on Thursday following strong results from a slew of companies, with focus squarely on Britain's central bank that is expected to lift interest rates by the most since 1995.

At (GMT 12:23 ),UK's benchmark FTSE 100 was last trading up at 0.56% percent, Germany's Dax was up by 0.97 % percent, France’s CAC was up by 0.72%percent.

Commodities Recap

Gold prices jumped more than 1% on Thursday as a pullback in the dollar and U.S. Treasury yields provided support ahead of a key U.S. jobs report that could influence the Federal Reserve’s policy stance.

Spot gold was up 1% at $1,781.83 per ounce by 1128 GMT, While U.S. gold futures rose 1.2% to $1,798.20.

Oil prices were broadly steady on Thursday as the market weighed tight supply against demand fears, after a build in U.S. crude and gasoline stocks sent prices to multi-month lows in the previous session.

Brent crude futures inched up 36 cents, or 0.37% to $97.14 a barrel by 0925 GMT, while West Texas Intermediate (WTI) crude futures were up 43 cents, a 0.47% gain, at $91.09.


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