Europe Roundup: Sterling rises but sticky inflation remains in focus, European stocks steady, Gold bounces back, Oil falls 2% on US debt deal struggles, OPEC+ talks uncertainty

Market Roundup

•Sweden Apr Trade Balance -2.70B,-1.60B forecast, 6.90B previous

•Sweden GDP (QoQ) 0.6%,0.2% forecast,-0.9% previous

•Sweden GDP (YoY)0.8%,0.3% forecast,-0.9% previous

•Sweden May Consumer Confidence 69.5,74.7 forecast,65.1 previous

•Switzerland GDP (QoQ) (Q1) 0.3%, 0.1% forecast, 0.0% previous

•Switzerland GDP (YoY) (Q1) 0.6%, 0.6% forecast ,0.8% previous

•EU Private Sector Loans (YoY)2.5%, 2.7% forecast , 2.9% previous

•EU Apr Loans to Non Financial Corporations 4.6%,4.7% forecast, 5.2% previous

•EU Apr Italian PPI (YoY) -1.5%, -4.0% forecast,3.8% previous

•EU Apr M3 Money Supply (YoY) 1.9%,2.1% forecast,2.5% previous

•EU May Consumer Confidence -17.4,-17.4 forecast,-17.5 previous

•EU May Services Sentiment 7.0,9.4 forecast,10.5 previous

•EU May Industrial Sentiment -5.2,0.1 forecast,-2.6 previous

•EU May Business and Consumer Survey 96.5,99.9 forecast,99.3 previous

•EU Mar Italian Industrial Sales (MoM) -0.30%, 0.10% forecast,1.30% previous

•EU May Business Climate 0.19 ,0.54 previous

Looking Ahead Economic Data(GMT)

•13:00 French 6-Month BTF Auction 3.234% previous

•13:00 French 3-Month BTF Auction 3.115% previous

•13:00 French 12-Month BTF Auction 3.324% previous

•13:00 US Mar S&P/CS HPI Composite - 20 n.s.a. (MoM) 0.4% forecast, 0.2% previous

•13:00 US Mar S&P/CS HPI Composite - 20 n.s.a. (YoY) -1.6% forecast,0.4% previous

•13:00 US Mar House Price Index (MoM) 0.2% forecast,0.5% previous

•13:00 US Mar House Price Index 393.0 forecast,394.8 previous

•13:00 US Mar House Price Index (YoY) 2.4% forecast, 4.0% previous

•13:00 US Mar S&P/CS HPI Composite - 20 s.a. (MoM) -0.4% forecast,0.1% previous

•14:00 US May CB Consumer Confidence 99.0 forecast,101.3 previous

•14:30 US May Dallas Fed Mfg Business Index -23.4 previous

•15:30 US 3-Month Bill Auction 5.250% previous

Looking Ahead Events and Other Releases(GMT)

•No data ahead

Currency forecast

EUR/USD: The euro strengthened against dollar on Tuesday as uncertainty remained on whether Congress will clear a U.S. debt ceiling deal . A handful of hard-right Republican lawmakers said on Monday they would oppose a deal to raise Washington's $31.4 trillion debt ceiling, in a sign that the bipartisan agreement could face a rocky path through Congress before the U.S. runs out of money next week. The euro was last up 0.28% at $1.0733 , having earlier hit a two-month low. Immediate resistance can be seen at 1.0762(38.2%fib), an upside break can trigger rise towards 1.0772(23.6%fib).On the downside, immediate support is seen at 1.0704 (50%fib), a break below could take the pair towards 1.0633(61.8%fib).

GBP/USD: Sterling rose against a weaker dollar on Tuesday, but stickier than expected British inflation remains in focus ahead of a quiet week for the country’s data calendar. Investors were largely focused on moves in the U.S. dollar as a deal to raise the U.S. debt ceiling faces its first test in Congress, and on the yen, which strengthened after an impromptu meeting of Japan’s finance ministry and central bank. At 1013 GMT, the pound was 0.5% higher against the dollar at $1.2416, and 0.35% up against the euro at 86.39 pence. Immediate resistance can be seen at 1.2450 (23.6%fib), an upside break can trigger rise towards 1.2481 (21DMA).On the downside, immediate support is seen at 1.2389 (23rd May low), a break below could take the pair towards 1.2331(38.2%fib).

USD/CHF: The dollar dipped against Swiss franc on Tuesday as safe-haven dollar weakened in a sign of broad optimism across markets that a U.S. debt ceiling crisis might be averted. U.S. markets reopen on Tuesday following Monday’s public holiday, reacting for the first time to a weekend deal to suspend the $31.4 trillion U.S. debt ceiling until 2025 while keeping some costs flat. A handful of Republican lawmakers have said they will oppose the agreement, in a sign that the bipartisan effort could face a rocky path through Congress . Immediate resistance can be seen at 0.9060(38.2%fib), an upside break can trigger rise towards 09087 (Daily high).On the downside, immediate support is seen at 0.9011 (38.2%fib), a break below could take the pair towards 0.8996(14DMA).

USD/JPY: The U.S. dollar pulled back from six-month peaks against the yen as Japanese officials gave their currency a nudge, as investors kept a wary eye on policy makers. Japan will closely watch currency market moves and respond appropriately as needed, the country's top currency diplomat said on Tuesday after financial authorities met in response to a weakening in the yen to its softest in six months versus the dollar.The yen strengthened on news of the meeting, and held onto those gains, with the dollar last down 0.2% at 140.16 yen having earlier risen as high as 140.93, its highest since November 2022.Strong resistance can be seen at 141.04(23.6%fib) an upside break can trigger rise towards 141.48(Higher BB).On the downside, immediate support is seen 139.42(38.2%fib), a break below could take the pair towards 138.94(11DMA)

Equities Recap

European stocks were steady on Tuesday, with defensive sectors in the lead as uncertainty remained on whether Congress will clear a U.S. debt ceiling deal and avert a catastrophic default.

At (GMT 12:12),UK's benchmark FTSE 100 was last trading down at 0.55 percent, Germany's Dax was up by 0.45 percent, France’s CAC was trading down by 0.45 percent.

Commodities Recap

Gold prices bounced back from their lowest level in more than two months on Tuesday as the dollar backtracked from highs, while lingering concerns over U.S. debt ceiling negotiations has kept investors on edge and rekindled demand for safe-haven bullion.

Spot gold rose 0.6% to $1,954.79 per ounce by 1045 GMT after hitting its lowest since March 17. U.S. gold futures were up 0.49% to $1,954.00.

Oil fell by nearly 2% on Tuesday as concerns about the U.S. debt ceiling pact cooled the market's risk-on sentiment and mixed messages from major producers clouded the supply outlook ahead of their meeting this weekend.

Brent crude futures fell $1.36, or 1.8%, to $75.71 a barrel by 0859 GMT. U.S. West Texas Intermediate (WTI) crude was down $1.19, or 1.6%, from Friday's close, to $71.48 a barrel. There was no settlement on Monday because of a U.S. public holiday.