Europe Roundup: Euro dips ahead of ECB meeting, European shares falls,Gold dips,Oil drops 1% as U.S. stockpile rise saps rally-October 27th,2021

Posted at 27 October 2021 / Categories Market Roundups

Market Roundup

•German Sep Import Price Index (YoY)  17.7%,18.0% forecast, 16.5% previous

•German Sep Import Price Index (MoM)  1.3%,1.5% forecast, 1.4% previous

•German Nov GfK German Consumer Climate  0.9,-0.5 forecast, 0.3 previous

•French Sep PPI (MoM)  1.7%,1.0% previous

•French Oct Consumer Confidence  99,101 forecast, 102 previous

•EU Private Sector Loans (YoY) 4.1%,4.2% previous

•Swiss Oct ZEW Expectations  15.6,25.7 previous

•EU Sep M3 Money Supply (YoY)   7.4%,7.5% forecast ,7.9% previous

Looking Ahead Economic Data (GMT)

•12:30 US Wholesale Inventories (MoM) 1.2% previous

•12:30 US Sep Durable Goods Orders (MoM)  -1.1% forecast, 1.8% previous

•12:30 US Sep Goods Trade Balance  -88.16B previous

•12:30 US Sep Core Durable Goods Orders (MoM)  0.4% forecast, 0.3% previous

•12:30 US Sep Goods Orders Non Defense Ex Air (MoM)  0.5% forecast, 0.6% previous

•12:30 US Sep Durables Excluding Defense (MoM) 2.4% previous

•14:30 US Cushing Crude Oil Inventories               -2.320M previous

•14:30 US Crude Oil Inventories 1.914M forecast, -0.431M previous

Looking Ahead - Events, Other Releases (GMT)

•14:00 Canada BoC Rate Statement

•14:00 Canada BoC Monetary Policy Report

•14:00 Canada BoC Interest Rate Decision


EUR/USD: The euro declined on Wednesday as expectations that the European Central Bank will take a dovish stance when it meets on Thursday attracted sellers in the pair. The ECB is expected to keep policy unchanged and leave a decision on its pandemic emergency bond purchase programme to December, but its president Christine Lagarde is expected to push back on market pricing that has seen breakeven inflation expectations hit seven-year highs above the ECB’s 2% target and a rate hike priced in for next year. Immediate resistance can be seen at 1.1658 (38.2%fib), an upside break can trigger rise towards 1.1708(50%fib).On the downside, immediate support is seen at 1.1588 (23.6%fib), a break below could take the pair towards 1.1500(Psychological level).

GBP/USD: The British pound declined against dollar on Wednesday ahead of a half-yearly update on the public finances and economic outlook from British finance minister Rishi Sunak.Sunak will try to show that he is moving Britain on from the coronavirus pandemic on Wednesday when he announces multi-billion-pound investments to help Prime Minister Boris Johnson meet spending promises to voters. The pound recently failed to capitalise on expectations of a rate rise from the Bank of England. By 0820 GMT, sterling traded marginally weaker at $1.3731 against the dollar. Immediate resistance can be seen at 1.3803(23.6%fib),an upside break can trigger rise towards 1.3856(Higher BB).On the downside, immediate support is seen at 1.3726(38.2%fib), a break below could take the pair towards 1.3687(50%fib).

USD/CHF: The dollar declined against Swiss franc on Wednesday as concern over more tension between Beijing and Washington weighed on markets. U.S. Federal Communications Commission voted to revoke the authorization for China Telecom’s U.S. subsidiary to operate in the United States after nearly two decades, citing national security. Currency markets have been generally quiet in recent sessions as investors wait for the U.S. Federal Reserve meeting next week. Immediate resistance can be seen at 0.9210(9DMA), an upside break can trigger rise towards 0.9225 (50%fib).On the downside, immediate support is seen at 0.9191(38.2%fib), a break below could take the pair towards 0.9149(23.6%fib).

USD/JPY: The dollar declined against yen on Wednesday as investors assessed how central banks would address growing inflationary pressure. Market participants have now turned their attention to the Bank of Japan (BOJ) and the European Central Bank (ECB) meetings on Thursday and the pivotal U.S. Federal Open Market Committee (FOMC) on Nov. 3. While the BOJ is set to maintain its massive stimulus programme and slash this year’s inflation forecast, rising inflation fears in the euro zone could pose a challenge to the ECB. The greenback was last down 0.33 % at 113.75 yen. Strong resistance can be seen at 114.05 (38.2%fib), an upside break can trigger rise towards 114.62(23.6%fib).On the downside, immediate support is seen at 113.60(50%fib), a break below could take the pair towards 113.16(61.8%fib).

Equities Recap

European stocks slipped on Wednesday, with miners leading the declines after concerns about Chinese intervention hit metal prices, while mixed corporate earnings reports kept investors on edge.

At (GMT 09:42 ),UK's benchmark FTSE 100 was last trading down at 0.17 percent, Germany's Dax was down by 0.25  % percent, France’s CAC   was last down by 0.26 percent.

Commodities Recap

Gold prices extended losses on Wednesday as firmer U.S. Treasury yields and expectations that the U.S. Federal Reserve and peers could finally announce the unwinding of economic support served to heap pressure on the metal.

Spot gold fell 0.4% to $1,786.20 an ounce by 0852 GMT, making for a 1.6% decline since rallying to a more than one-month high last week. U.S. gold futures dropped 0.4% to $1,786.00.

Oil prices fell on Wednesday after industry data showed crude oil stockpiles rose more than expected and fuel inventories unexpectedly increased last week in the United States, the world's largest oil consumer.

Brent oil futures fell $1.13 cents, or 1.3%, to $85.27 a barrel by 0902 GMT after closing at the highest in seven years on Tuesday.

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