Market Roundup
•French May Consumer Confidence 90, 91 forecast,90 previous
•Spanish Apr Retail Sales (YoY) 0.3%,0.6% previous
•Swiss May ZEW Expectations 18.2,17.6 previous
•Italian May Business Confidence 88.4,88.1 forecast,87.6 previous
•Italian May Italian Consumer Confidence 96.4 ,96.0 forecast,95.2 previous
•EU May CPI (YoY) 2.7%,2.5% previous
•EU May CPI (MoM)0.1%,0.6% previous
•EU Private Sector Loans (YoY)0.2%,0.4% forecast,0.2% previous
•German May CPI (MoM) 3.0%, 0.6% previous
•German May CPI (YoY) 2.9%, 3.0% previous
•EU May North Rhine Westphalia CPI (MoM) 0.2%, 0.3% previous
•EU May CPI (YoY) 2.1%,2.1% previous
•EU May CPI (MoM) 0.0%,0.6% previous
•EU May CPI (YoY) 2.5%, 2.3% previous
•German May CPI (MoM) 0.1%,0.2% forecast,0.5% previous
•German May HICP (YoY) 2.8% ,2.7% forecast,2.4% previous
• German HICP (MoM) 0.2%, 0.2% forecast,0.6% previous
• German CPI YoY 2.4%, 2.4% forecast, 2.2% previous
• US May Richmond Manufacturing Index 0, -6 forecast,-7 previous
• US May Richmond Services Index 3,-13 previous
• US May Richmond Manufacturing Shipments 13, -10 previous
Looking Ahead Economic Data(GMT)
• 14:30 US May Dallas Fed Services Revenues 0.3 previous
•14:30 US May Texas Services Sector Outlook -10.6 previous
Looking Ahead Events And Other Releases(GMT)
• 23:00 US FOMC Member Bostic Speaks
Currency Forecast
EUR/USD: The euro declined on Wednesday as European currency dropped following German regional inflation data. German inflation rose slightly more than expected to 2.8% in May, preliminary data showed on Wednesday, a sign that price pressures remain present in Europe's largest economy.Analysts polled by Reuters had forecast a reading of 2.7%, after a year-on-year increase in consumer prices of 2.4% in April, based on data harmonised to compare with other European Union countries. In Germany, cooling energy and food prices have had an easing effect on inflation this year - but core inflation, which excludes those more volatile elements, has remained high.Economists will pay close attention to the data ahead of the release of inflation figures from the wider euro zone on Friday. Immediate resistance can be seen at 1.0892(23.6%fib), an upside break can trigger rise towards 1.0909(Higher BB).On the downside, immediate support is seen at 1.0814 (38.2% fib), a break below could take the pair towards 1.0759(50% fib).
GBP/USD: The pound eased on Wednesday as dollar held firm boosted by higher U.S. yields ahead of key inflation data later in the week. The U.S. core personal consumption expenditures (PCE) price index report, the Federal Reserve's preferred inflation gauge, is scheduled for release on Friday. Expectations are that it will remain stable on a monthly basis.The pound has been supported by signs that the British economy is picking up, while the Bank of England is unlikely to cut rates before August at the earliest. The pound was a touch lower on the dollar at $1.2750, having hit a two-month high the day before, leaving the dollar index flat at 104.67. Immediate resistance can be seen at 1.2773(23.6%fib), an upside break can trigger rise towards 1.2817(Higher BB).On the downside, immediate support is seen at 1.2737(Daily low), a break below could take the pair towards 1.2695(38.2% fib).
USD/CHF: The dollar eased against the Swiss franc on Wednesday as Investors focused on a key inflation report due later this week, which could offer clues about the Federal Reserve's future policy decisions. The U.S. core personal consumption expenditures (PCE) price index report - the Federal Reserve's preferred measure of inflation - will be released on Friday. Expectations are for it to hold steady on a monthly basis. Markets are currently fully pricing one 25 basis-point Fed rate cut this year, most likely in September or November. They see a one-third chance of a second 25 bps cut by year-end. Immediate resistance can be seen at 0.9140 (23.6% fib), an upside break can trigger rise towards 0.9168 (Higher BB).On the downside, immediate support is seen at 0.9086(May 28th low), a break below could take the pair towards 0.9066(38.2% fib).
USD/JPY: The U.S. dollar strengthened against yen on Wednesday as investors look forward to U.S. inflation data due later this week for more clarity on interest rate cut timings. Focus this week will be on the U.S. core personal consumption expenditures price index (PCE), the Fed's preferred inflation gauge, due on Friday.Fed meeting minutes released last week showed that the policy response, for now, would involve maintaining the benchmark rate at its current level. Traders are pricing in, opens new tab about a 63% chance of a Fed rate cut by November. The dollar reached as high as 157.41 yen early on Wednesday, inching back to levels that led to bouts of likely intervention from Tokyo at the end of April and early May.It was last at 157.275 yen, up 0.06% on the day. Strong resistance can be seen at 157.40(23.6%fib), an upside break can trigger rise towards 157.89(Higher BB).On the downside, immediate support is seen at 155.77(50% fib), a break below could take the pair towards 155.00(Psychological level).
Equities Recap
European shares declined on Wednesday as rising bond yields globally spurred concerns of interest rates staying elevated for longer, even as investors awaited more economic data to firm up bets on rate cuts.
UK's benchmark FTSE 100 was last down by 0.77 percent, Germany's Dax was last down by 1.11 percent, France’s CAC was last down by 1.39 percent.
Commodities Recap
Gold prices slipped on Wednesday as U.S. Treasury yields firmed, while investors geared up for a crucial inflation report due later this week that could provide insights into the Federal Reserve's policy path.
Spot gold fell 0.82% to $2,341.53 per ounce by 1212 GMT. On May 20, prices hit an all-time high of $2,449.89.
Oil prices grazed a four-week high on Wednesday on expectations that major producers will extend output cuts at a meeting on Sunday and that fuel consumption will start rising as the peak summer demand season kicks off.
Brent crude futures were up 19 cents, or 0.2%, at $84.41 a barrel at 1335 GMT, after touching the highest since May 1 at $85.02.
U.S. West Texas Intermediate futures were up 34 cents, or 0.4%, to $80.17, after also hitting the highest since May 1 at $80.62.
