Europe Roundup: Euro dips ahead of US inflation data ,European shares fall, Oil falls on surprise increase to U.S. inventories

Market Roundup

•German Apr CPI (MoM) 0.4%,0.4%forecast,0.8% previous

• German Apr CPI (YoY) 7.2%,7.2% forecast, 7.4% previous

•German Apr HICP (MoM) 0.6%, 0.6% forecast, 1.1% previous

•German Apr HICP (YoY) 7.6%, 7.6% forecast,7.8% previous

•Italian Mar Industrial Production (YoY) -3.2%, -1.7% forecast, -2.3% previous

•Italian Mar Industrial Production (MoM) -0.6%, 0.3% forecast,-0.2% previous

•Greek Apr HICP (YoY) 4.5%, 5.4% previous

• Greek Industrial Production (YoY) -0.2%, 5.2% previous

Looking Ahead Economic Data(GMT)

• 12:30 US Apr Core CPI (YoY) 5.5%, 5.6% previous

•12:30 US Apr Real Earnings (MoM) 0.0% forecast,-0.1% previous

•12:30 US Apr CPI (MoM) 0.4% forecast,0.1% previous

•12:30 US Apr Core CPI (MoM) 0.4% forecast, 0.4% previous

•12:30 US Apr Core CPI Index 306.21 forecast, 305.24 previous

•12:30 US Apr CPI (YoY) 5.0% forecast,5.0% previous

•12:30 US Apr CPI Index, n.s.a. 303.53 forecast,301.84 previous

•12:30 US Apr CPI, n.s.a (MoM) 0.33% previous

•12:30 US Apr CPI Index, s.a 303.28 forecast,301.81 previous

•12:30 Canada Mar Building Permits (MoM) -2.9% forecast,8.6% previous

•14:30 US Crude Oil Inventories -0.917M forecast, -1.280M previous

•14:30 US Gasoline Production 0.120M forecast,-0.638M previous

Looking Ahead Events And Other Releases (GMT)

•No events Ahead

Currency Forecast

EUR/USD: The euro declined on Wednesday as investors positioned for April U.S. inflation data, which could have a bearing on the Federal Reserve's interest rate policy. The U.S. consumer price index (CPI) data is due at 1230 GMT. Economists polled by Reuters expect a 5.5% year-on-year increase in core consumer prices for April. Fed Chair Jerome Powell has said it is now an open question whether further rate increases will be warranted in an economy still facing high inflation, but also showing signs of a slowdown. Immediate resistance can be seen at 1.1015(5DMA), an upside break can trigger rise towards 1.1046(23.6%fib).On the downside, immediate support is seen at 1.0963 (38.2%fib ), a break below could take the pair towards 1.0935(Lower BB).

.GBP/USD: The pound steadied against dollar on Wednesday as traders bet a rate hike from the Bank of England on Thursday will not be the last. Sterling has rallied around 22% since tumbling to a record low of $1.0327 in September, including a 4.6% rally this year. It remains around 17% below its level 10 years ago, however. A better-than-expected although still lacklustre economic performance has supported sterling, as has a relatively sharp fall in the dollar as U.S. inflation has cooled. Immediate resistance can be seen at 1.2657 (23.6%fib), an upside break can trigger rise towards 1.2672(Higher BB).On the downside, immediate support is seen at 1.2576(5DMA), a break below could take the pair towards 1.2477(38.2%fib).

USD/CHF: The dollar strengthened against Swiss franc on Wednesday as dollar strengthened ahead of U.S. consumer price data that could damage hopes for interest rate cuts if inflation fails to show much of a decline. April U.S. consumer price data is due at 1230 GMT and economists expect the headline CPI to hold steady at an annual 5% and core CPI to moderate very slightly to 5.5%, though anything stickier could confound bets interest rates will fall. Interest rate futures imply about a 60% chance the Federal Reserve cuts rates in September, according to the CME FedWatch tool. Immediate resistance can be seen at 0.8936(Daly high), an upside break can trigger rise towards 0.8977 (38.2%fib).On the downside, immediate support is seen at 0.8894(5DMA), a break below could take the pair towards 0.8855(23.6%fib).

USD/JPY: The dollars strengthened against Japan's yen on Wednesday as traders positioned themselves for inflation data that could impact the U.S. Federal Reserve’s policy stance. The U.S. consumer price index (CPI) data is due at 1230 GMT. Markets are currently pricing in a 83% chance of the U.S. central bank holding rates at their current level in June. On Tuesday, Fed Governor Philip Jefferson said the U.S. economy is slowing in an “orderly fashion”, while New York Fed President John Williams said it is too soon to say whether the U.S. central bank is done raising interest rates. Strong resistance can be seen at 135.70(23.6%fib) an upside break can trigger rise towards 136.75(Higher BB).On the downside, immediate support is seen at 134.65(5DMA), a break below could take the pair towards 134.22(38.2%fib)

Equities Recap

European shares fell on Wednesday as gains in Credit Agricole after the bank's upbeat earnings were more than offset by market jitters ahead of U.S. inflation data that is likely to shape expectations for rate cuts in the world's largest economy.

At (GMT 12:21),UK's benchmark FTSE 100 was last trading down at 0.05 percent, Germany's Dax was down by 0.08 percent, France’s CAC was trading down by 0.09 percent.

Commodities Recap

Gold prices eased on Wednesday, after rising in the previous two sessions, as the dollar firmed and investors positioned for April U.S. inflation data, which could have a bearing on the Federal Reserve's interest rate policy.

Spot gold was down 0.3% at $2,029.09 per ounce by 1151 GMT, while U.S. gold futures lost 0.3% at $2,037.30.

Oil prices fell on Wednesday, ending a three-day rally as an unexpected rise in U.S. oil inventories sparked demand concerns and investors awaited inflation data for a steer on U.S. interest rates.

Brent crude dropped 74 cents, or 1%, to $76.69 a barrel by 1115 GMT while U.S. West Texas Intermediate (WTI) crude fell 75 cents, or 0.9%, to $72.97.