•Italian May Industrial Production (YoY) -3.3%,-2.9%
• Italian May Industrial Production (MoM) 0.5%,0.0% forecast,-1.0% previous
•Greek May Industrial Production (YoY) 6.7%, 10.8% previous
Looking Ahead Economic Data(GMT)
• 14:00 US May Wholesale Inventories (MoM) 0.6% forecast,0.1% previous
• 14:00 US May Wholesale Trade Sales (MoM) 0.1% previous
• 14:30 US May Heating Oil Stockpiles -0.572M previous
• 14:30 US Distillate Fuel Production 0.204M previous
• 14:30 US Gasoline Production 0.180M previous
• 14:30 US Crude Oil Imports -0.555M previous
• 14:30 US Crude Oil Inventories 0.700M forecast,-12.157M previous
• 16:00 US Atlanta Fed GDPNow (Q2)1.5% forecast,1.5% previous
Looking Ahead Events And Other Releases(GMT)
•14:00 US Fed Chair Powell Testifies
•18:30 US FOMC Member Bowman Speaks
•18:30 US Fed Goolsbee Speaks
Currency Forecast
EUR/USD: The euro edged higher on Wednesday as investors brace for a political deadlock in France in the wake of the shock election win for the country's leftist alliance. The single European currency came under pressure last month after the snap election was called, but has since clawed back some of those losses, although the risk of impasse in parliament is keeping investors wary. France faced potential political deadlock after elections on Sunday threw up a hung parliament, with a leftist alliance unexpectedly taking the top spot but no group winning a majority.Voters delivered a major setback for Marine Le Pen's nationalist, eurosceptic National Rally (RN), which opinion polls had predicted would win the second-round ballot but ended up in the third spot. The results were also a blow for centrist President Emmanuel Macron, who called the snap election to clarify the political landscape after his ticket took a battering at the hands of the RN in European Parliament elections last month. Immediate resistance can be seen at 1.0840(23.6%fib).), an upside break can trigger rise towards 1.0863 (Higher BB).On the downside, immediate support is seen at 1.0799 (38.2%fib), a break below could take the pair towards 1.0762 (50%fib).
GBP/USD: The pound held near one-month highs on Wednesday, supported by the belief among investors that U.S. interest rates are set to fall sooner than many had predicted, which dented the dollar. The main driver for the sterling/dollar pair on Wednesday came from the dollar side, after Federal Reserve Chair Jerome Powell told lawmakers at his semi-annual testimony the day before that the U.S. is "no longer an overheated economy.Powell said he did not want to send any signals about the timing of a possible rate action, but investors took his remarks as a sign the central bank is edging closer to its first cut since 2020.Sterling was last up 0.16% at $1.2807, having hit a session peak of $1.28455 on Monday, its highest since June 12. It is up 0.4% week-on-week and has gained 1.2% so far in July. Immediate resistance can be seen at 1.2822(23.6%fib), an upside break can trigger rise towards 1.2852(Higher BB).On the downside, immediate support is seen at 1.2754(38.2%fib), a break below could take the pair towards 1.2693(50%fib).
USD/CHF: The dollar edged higher against the Swiss franc on Wednesday following cautious but encouraging remarks on inflation by Federal Reserve Chair Jerome Powell the day before, which raised expectations for imminent U.S. rate cuts. Investors will assess Powell second day of testimony to the House later in the day, along with U.S. consumer price index (CPI) data which is due on Thursday. The CPI data is expected to show that headline prices rose 0.1% month-on-month, while core prices gained 0.2%. That would put annual gains at 3.1% and 3.4%, respectively. The chances of a September cut have risen to more than 70% compared to a near-even chance a month ago, according to the CME FedWatch tool . Immediate resistance can be seen at 0.9000(23.6%fib), an upside break can trigger rise towards 0.9052(Higher BB).On the downside, immediate support is seen at 0.8956(38.2%fib), a break below could take the pair towards 0.8915(50%fib).
USD/JPY: The dollar strengthened on Wednesday as the Japanese currency remained under pressure from the stark interest rate differentials between the U.S. and Japan. But data on Wednesday showed Japan's wholesale inflation accelerated in June as the yen's declines pushed up the cost of raw material imports, keeping alive market expectations for a near-term interest-rate hike by the central bank. The Bank of Japan said on Tuesday some market players called on the central bank to slow its bond buying to roughly half the current pace under a scheduled tapering plan due this month. The dollar index, which measures the U.S. currency against six others including the euro and yen, was little changed at 105.09, after rising about 0.1% on Tuesday. Against the yen, the dollar rose 0.1% to 161.515 .Strong resistance can be seen at 161.87(23.6%fib), an upside break can trigger rise towards 162.00(Psychological level). On the downside, immediate support is seen at 160.61 (38.2%fib), a break below could take the pair towards 159.70(50%fib).
Equities Recap
European shares advanced on Wednesday led by corporate earnings, although gains were limited by weak oil and metal prices, while investors awaited Federal Reserve Chair Jerome Powell's second day of testimony for more clues on interest rates.
At (GMT 12:22 ) UK's benchmark FTSE 100 was up by 0.59 percent, Germany's Dax was up by 0.75percent, France’s CAC was by up 0.75 percent.
Commodities Recap
Gold prices edged up on Wednesday, a day after Federal Reserve Chair Jerome Powell's comments suggested the case for interest rates cuts is getting stronger, while investors braced themselves for a crucial U.S. inflation report.
Spot gold rose 0.4% to $2,372.83 per ounce by 0900 GMT. U.S. gold futures GCcv1 climbed 0.5% to $2,379.20.
Oil prices rose on Wednesday on expectations that U.S. crude and gasoline inventories fell last week, but further gains were limited by the restart of output in the U.S. Gulf as the threat from Hurricane Beryl faded and slack Chinese consumer demand.
Brent futures were up 19 cents, or 0.2%, at $84.85 a barrel at 1013 GMT, after falling 1.3% in the previous session.
U.S. West Texas Intermediate (WTI) crude was up 28 cents, or 0.3%, to $81.69 a barrel, after falling 1.1% in the previous session.
