Europe Roundup: Euro gains against weaker dollar, European shares rise, Gold gains, Oil rises on US crude inventory draw, Mideast tensions-July 3rd,2024

Market Roundup

• Italian Jun Composite PMI  51.3,52.3 previous

•   Italian Jun Services PMI  53.7,53.9 forecast,54.2 previous

•French Jun S&P Global Composite PMI  48.8,48.2 forecast,48.9 previous

•French Jun French Services PMI49.6,48.8 forecast,49.3 previous

•German Jun Composite PMI  50.4,50.6     forecast,52.4 previous

•German Jun Services PMI  53.1               ,53.5 forecast,54.2 previ,ous

•EU Jun Services PMI  52.8,52.6 forecast ,53.2 previous

•EU Jun S&P Global Composite PMI  50.9,50.8 forecast ,52.2 previous

•UK Jun Composite PMI 52.3,51.7 forecast ,53.0 previous

•UK Jun Services PMI 52.1,51.2 forecast ,52.9 previous

Looking Ahead Economic Data(GMT)

• 12:15  US Jun ADP Nonfarm Employment Change  163K forecast ,152K previous

•12:30   Canada May Imports 65.50B previous

•12:30   Canada May Exports  64.45B previous

•12:30   Canada May Trade Balance -1.30B forecast ,-1.05B previous

•12:30   US May Trade Balance  -76.30B  forecast ,-74.60B previous

•12:30   US Initial Jobless Claims 234K forecast ,233K previous

•12:30   US Continuing Jobless Claims1,840K forecast ,1,839K previous

•12:30   US Jobless Claims 4-Week Avg.  236.00K previous

•13:45   US S&P Global Composite PMI 54.6 forecast ,54.5 previous

•13:45   US Jun Services PMI  55.1 forecast ,54.8 previous

•14:00   US May Factory orders ex transportation (MoM)  0.3% forecast ,0.7% previous

•14:00   US Durables Excluding Transport (MoM)  -0.1% previous

•14:00   US May Durables Excluding Defense (MoM)  -0.2% previous

•14:00   US ISM Non-Manufacturing New Orders 54.1 previous

•14:00   US Jun ISM Non-Manufacturing Employment  47.1 previous

Looking Ahead Events And Other Releases(GMT)

•NO Events Ahead

Currency  Forecast

EUR/USD: The euro strengthened against dollar on Wednesday   as investors responded positively to dovish comments from Federal Reserve Chair Jerome Powell and looked forward to the upcoming French vote and UK national elections. France's National Rally (RN) stepped up their bid to block the far-right party from power, with more candidates agreeing to pull out of this weekend's run-off election to avoid splitting the anti-RN vote. Euro zone inflation eased last month, but a crucial services component remained stubbornly high, fuelling concerns that domestic price pressures could stay at elevated levels.The euro edged 0.07% higher to $1.0739, but still traded near the top of its range since mid-June. Immediate resistance can be seen at 1.0766(38.2% fib), an upside break can trigger rise towards 1.0807(23.6% fib).On the downside, immediate support is seen at 1.0732(50% fib), a break below could take the pair towards 1.0703(61.8% fib).

GBP/USD: The pound strengthened against   dollar on Wednesday as  investors awaited UK election due July 4. The opposition Labour party is widely expected to win in Thursday's poll, ending 14 years of Conservative government. The UK's tight finances mean any new government will have little room to up spending, potentially removing a catalyst of sterling weakness and keeping volatility contained. Focus now shifts to Friday's non-farm payrolls, which will be crucial in assessing whether the U.S. labor market remains resilient against the backdrop of decades-high interest rates. Sterling held its ground at $1.2680 after rising 0.28% on Tuesday. Immediate resistance can be seen at 1.2698(38.2%fib), an upside break can trigger rise towards 1.2749(23.6%fib).On the downside, immediate support is seen at 1.2643(50%fib), a break below could take the pair towards 1.2599(61.8% fib).

 USD/CHF: The dollar eased against the Swiss franc on Wednesday as dollar gave up ground  after dovish comments from Federal Reserve Chair Jerome Powell. Fed Chair Jerome Powell on Tuesday noted that the U.S. central bank still needs more data before cutting interest rates to ensure that recent weaker inflation readings give a true picture of what is happening to underlying price pressures.Data on Tuesday showed U.S. job openings rose in May after two months of declines, indicating softening labour market conditions potentially prompting Fed interest rate cuts this year.The market now sees a 65% chance of the Fed cutting interest rates in September as well as another cut in December.Next in line for investors will be the ADP employment and weekly jobless claims data due later in the day, and the non-farm payrolls report due on Friday. Immediate resistance can be seen at 0.9050 (38.2% fib), an upside break can trigger rise towards 0.9107 (23.6% fib).On the downside, immediate support is seen at 0.9013 (50% fib), a break below could take the pair towards 0.8967(61.8% fib).

USD/JPY: The U.S. dollar hit a new 38-year high to the yen on Wednesday as  Japanese officials largely remained on the sidelines amid the risk of intervention. Japanese authorities have been largely quiet on the yen this week, with Finance Minister Shunichi Suzuki only commenting on Tuesday that moves were being watched vigilantly. He refrained from repeating the oft-used warning that the ministry stood ready to act.Atsushi Mimura is taking over as the ministry of finance's currency czar at the end of this month, replacing Masato Kanda, who oversaw the 9.8 trillion yen ($60.67 billion) round of intervention spanning several days in late April and early May, when the currency plunged to 160.82 per dollar. The yen slid about 0.2% to reach 161.875 per dollar for the first time since December 1986. Strong resistance can be seen at 161.85(Daily high), an upside break can trigger rise towards 162.00(Psychological level).On the downside, immediate support is seen at 159.92 (38.2% fib), a break below could take the pair towards 158.49(50%fib).

Equities Recap

European shares rose on Wednesday as investors welcomed dovish comments from Federal Reserve Chair Jerome Powell and looked ahead to the second round of the French vote and national elections in the UK.

UK's benchmark FTSE 100 was last up by 0.64percent, Germany's Dax was last up  by 1.04 percent, France’s CAC was last  up by 1.36 percent.

Commodities Recap

Gold prices strengthened on Wednesday as the dollar eased after dovish comments from Federal Reserve Chair Jerome Powell, with investors now turning to minutes from the U.S. central bank's latest policy meeting to gauge future interest rate cuts.

Spot gold rose 0.7% to $2,344.60 per ounce by 0846 GMT. U.S. gold futures gained 0.9% to $2,354.20.

Oil prices rose on Wednesday after industry data showed a bigger-than-expected draw in U.S. crude stockpiles, while the market kept tabs on flaring tensions in the Middle East.

Brent crude futures edged up 46 cents, or 0.5%, to $86.70 per barrel at 0645 GMT. U.S. West Texas Intermediate crude futures climbed 42 cents or 0.5% to $83.23 per barrel.