Market Roundup
•UK Jul Employment Change 3M/3M (MoM) 40K, 128K forecast, 160K previous
•UK Jul Average Earnings Index +Bonus 5.5%, 5.4% forecast, 5.1% previous
•UK Jul Unemployment Rate 3.6%, 3.8% forecast, 3.8% previous
•UK Jul Average Earnings ex Bonus 5.2%, 5.0% forecast, 4.7% previous
•UK Aug Claimant Count Change 6.3K, -13.2K forecast, -10.5K previous
• German Aug CPI (MoM) 0.3%,0.3% forecast, 0.9% previous
•German Aug HICP (MoM) 0.4% , 0.4% forecast, 0.8% previous
•Swiss Aug PPI (MoM) -0.1%, 0.1% forecast,-0.1% previous
•Swiss Aug HICP (YoY) 10.5%, 10.3% forecast, 10.7% previous
•Spanish Aug CPI (YoY) 10.5%, 10.4% forecast, 10.8% previous
•German Sep ZEW Economic Sentiment -61.9, -60.0 forecast, -55.3 previous
•EU Sep ZEW Economic Sentiment -60.7 , -58.3 forecast, -54.9 previous
•German Sep ZEW Current Conditions -60.5, -52.2 forecast, -47.6 previous
Looking Ahead - Economic Data (GMT)
•12:30 US Aug CPI Index, s.a 295.27 previous
•12:30 US Aug Real Earnings (MoM) 0.5% previous
•12:30 US Aug CPI Index, n.s.a 295.53 forecast, 296.28 previous
•12:30 US Aug Core CPI (MoM) 0.3% forecast, 0.3% previous
•12:30 US Aug Core CPI (YoY) 6.1% forecast, 5.9% previous
•12:30 US Aug CPI (YoY) 8.1% forecast, 8.5% previous
•12:30 US Aug CPI (MoM) -0.1% forecast, 0.0% previous
•12:55 US Redbook (YoY) 10.9% previous
•14:00 US IBD/TIPP Economic Optimism 38.1 previous
•15:00 US Aug Cleveland CPI (MoM) 0.5% previous
•18:00 US Aug Federal Budget Balance -213.5B forecast, -211.0B previous
Looking Ahead - Economic events and other releases (GMT)
•No events ahead
Fxbeat
EUR/USD: The euro found its footing above parity on Tuesday as hawkish comments from policymakers lifted euro across the board. The euro has enjoyed a respite above parity due to hawkish noises from the European Central Bank. Last week, five sources close to the matter said Europe's benchmark rate could rise to 2% or beyond to tame inflation.On Tuesday, German harmonised inflation was confirmed at 8.8% in August, unrevised from the preliminary reading. Spanish consumer prices rose 10.5% year-on-year in August, slightly higher than the flash estimate. Immediate resistance can be seen at 1.0201(38.2%fib), an upside break can trigger rise towards 1.0248( (23.6%fib).On the downside, immediate support is seen at 1.0133(30DMA), a break below could take the pair towards 1.0057(50%fib).
GBP/USD: Sterling strengthened against dollar on Tuesday despite data showing Britain's jobs boom is fading, as the employment report was overshadowed by weakness in the dollar ahead of an update on U.S. inflation. The dollar's hesitancy gave some respite to the pound, which has been battered in recent months by a drumbeat of bad news about Britain's faltering economy, persistent inflation and mounting energy crisis. Official data on Tuesday showed Britain's jobless rate hit its lowest since 1974, a positive indicator at the face of it, but which in fact was down to the workforce shrinking as the economy falters. The pound nonetheless rose 0.2% on Tuesday morning to reach $1.1709, above its recent nadir of $1.14 hit last week. Immediate resistance can be seen at 1.1741(Daily high), an upside break can trigger rise towards 1.1857(50%fib).On the downside, immediate support is seen at 1.1692 (38.2%fib),a break below could take the pair towards 1.1605(5DMA).
USD/CHF: The dollar declined against the Swiss franc on Tuesday ahead of U.S. inflation data that could show signs of easing price pressure. U.S. inflation figures are due at 1230 GMT and the consensus is for the core consumer price index to have risen 0.3% month-on-month in August, at the same pace as July. Headline inflation is expected to decline 0.1% month-on-month.Recent dollar gains have slowed on market expectations that peaking inflation will mean less aggressive interest rate hikes from the Federal Reserve. Fed funds futures are fully pricing in a half point rate rise at next week's Federal Open Market Committee meeting and currently imply a greater than 85% chance of a larger 75 bp increase. Immediate resistance can be seen at 0.9576 (38.2%fib), an upside break can trigger rise towards 0.9630(5DMA).On the downside, immediate support is seen at 0.9483 (50% fib), a break below could take the pair towards 0.9429 (Lower BB).
USD/JPY: The dollar was softer against the yen on Tuesday as the Japanese currency found support from comments from officials signalling the government could take steps to counter excessive yen weakness. A senior government official said on Sunday, Japan's government must take steps as needed to counter excessive declines in the yen. The comments from Seiji Kihara, the deputy chief cabinet secretary of Prime Minister Fumio Kishida's government, are the latest to highlight authorities' deep concern about the yen's slide. The yen has been hammered against the dollar as investors focus on the widening divergence between the U.S. Federal Reserve's aggressive interest rate hikes and the BoJ pledge to maintain ultra-low rates. Strong resistance can be seen at 143.25(5DMA), an upside break can trigger rise towards 144.21(23.6%fib).On the downside, immediate support is seen at 141.50(38.2%fib), a break below could take the pair towards 140.80(14DMA).
Equities Recap
European shares rose for a fourth straight session on Tuesday, with Aveva jumping on a report that France's Schneider was nearing a deal to buy out the company.
At (GMT 12:20 ),UK's benchmark FTSE 100 was last trading up at 0.43 percent, Germany's Dax was up by 0.98 percent, France’s CAC finished was up by 0.82 percent.
Commodities Recap
Gold prices traded in a tight range on Tuesday as investors held off on large bets ahead of key U.S. inflation data that could influence the size of future Federal Reserve interest rate hikes.
Spot gold rose 0.2% to $1,727.90 per ounce by 1106 GMT. Prices hit a two-week high of $1,734.99 on Monday as the dollar fell.U.S. gold futures were little changed at $1,739.60.
Oil prices rose on Tuesday as worries about tight fuel supplies ahead of winter offset investor concerns about falling demand in China, the world's biggest crude importer.
Brent crude gained 78 cents, or 0.8%, to $94.78 a barrel by 1030 GMT, while WTI crude rose 79 cents, or 0.9%, to $88.57 a barrel. Both contracts fell by more than $1 earlier in the session.
