Europe roundup: Sterling rises as Bank of England key speeches loom, European stocks gain, gold eases, oil rebounds as supply issues dominate – April 20, 2022

Market overview

• German March PPI (monthly) 4.9%, 2.6% forecast, 1.4% previous

• Registration of Italian cars in March (Annual) -29.7%, -22.6% previous

• German March PPI (Annual) 30.9%, 28.2% forecast, 25.9% previous

• German car registration in March (MoM) 20.4%, previous 8.9%

• Italian EU trade balance -0.12 billion, previous -0.89 billion

• February Italian trade balance -1.662 billion, previous -5.052 billion

• EU Industrial Production (monthly) in February 0.7%, forecast 0.2%, previous -0.7%

Future Outlook – Economic Data Coming Soon (GMT)

•12:30 Canada Median CPI (Annual) 3.5% previous

•12:30 Canada CPI truncated (Annual) 4.3% previous

•12:30 Canada ADP Non-Farm Employment Change 475.0K previous

•12:30 p.m. Canadian New Housing Price Index (monthly) 1.1% previous

•12:30 Canada March CPI (monthly) 1.0% forecast, 1.0% previous

•12:30 Canada Mar Core CPI (MoM) 0.5% forecast, 0.8% previous

• 2:00 p.m. US March Existing Home Sales (Monthly) -7.2% previous

• 2:00 p.m. US March existing home sales: 5.80 million forecast, 6.02 million olds

• 14:00 US gasoline inventories -0.976 M forecast, -3.649 M previous

• 14:00 Cushing’s crude oil inventories in the United States 0.450 M previous

• 2:00 p.m. Crude oil inventories in the United States 2.471 M forecast, 9.382 M previous

Future Outlook – Economic Events and Other Releases (GMT)

• 6:00 p.m. US Beige Book

•2:30 p.m. Daly, member of the American FOMC, takes the floor

• 2:30 p.m. US President of the Chicago Fed, Evans, speaks

fxbeat

EUR/USD: The euro strengthened on Wednesday as upbeat German producer price data boosted the euro across the board. German producer prices rose 30.9% year on year in March, reflecting the effects of war in Ukraine for the first time, data from the Federal Statistics Office showed on Wednesday. The figures of March mark six straight months of increasingly strong increases, mainly due to rising energy prices, according to the statistics office. The rise in factory gate costs, considered a leading indicator of consumer prices, was the largest since records began in 1949, the statistics office said. Producer prices jumped 4.9% from the previous month. Immediate resistance can be seen at 1.0801 (5DMA), a break up can trigger a rise towards 1.0849 (38.2% fib). On the downside, immediate support is seen at 1.0765 (23.6% fib), a break below could take the pair towards 1.0717 (BB lower).

GBP/USD: The pound rose against the dollar on Wednesday, gaining after four days of losses, as investors’ attention turned to potential policy signals from the Bank of England this week. Thursday’s speeches by Bank of England (BoE) policymaker Catherine Mann and Governor Andrew Bailey were seen as potentially key drivers for the pound. await indications on how the BoE views the rate outlook. The British pound rose 0.2% to $1.30275, moving away from last week’s lows not seen since November 2020. Immediate resistance can be seen at 1.3069 (38.2% fib) , an upside break may trigger a rise towards 1.3158 (50% fib). On the downside, immediate support is seen at 1.2970 (23.6% fib), a break below could take the pair towards 1.2946 (BB lower).

USD/CHF: The dollar edged higher against the Swiss franc on Wednesday as investors gauged the impact on the Eurozone economy due to the war in Ukraine. The dollar rose on Tuesday as hawkish comments from US central bank officials, including St. Louis Federal Reserve Chairman James Bullard, propelled the dollar and 10-year Treasury yields to multi-year highs. . The 10-year Treasury’s inflation-protected yield, or real yields, hit two-year highs on Wednesday, briefly moving into positive territory for a second straight day. Immediate resistance can be seen at 09533 (23.6% fib), a break up can trigger a rise towards 0.9553 (23.6% fib). On the downside, immediate support is seen at 0.9446 (50% fib), a break below could take the pair down to 0.9422 (61.8% fib).

USD/JPY: The dollar fell on Wednesday after the Bank of Japan intervened again in the market to defend its ultra-low interest rate policy, creating a stark contrast to the United States where Treasury yields have reached new heights. The BOJ again offered to buy unlimited amounts of Japanese government bonds to curb the rise in Japanese 10-year yields, which were bumping up against its 0.25% tolerance cap. The US dollar hit 129.43 yen for the first time since April 2002 before easing to trade for the last time down 0.21% at 127.93. A strong resistance can be seen at 128.23 (38.2% fib), a break up can trigger a rise towards 129.29 (23.6% fib). On the downside, immediate support is seen at 127.37 (50%fib), a break below could take the pair down to 126.35 (61.8%fib).

Summary of actions

European stocks rose on Wednesday after a few positive earnings reports boosted sentiment, while concerns over the war in Ukraine, slowing growth and rising yields limited gains.

At (12:00 GMT), Britain’s benchmark FTSE 100 last traded 0.12%, Germany’s Dax was up 1.14%, France’s CAC ended up 1.38 %.

Summary of raw materials

Gold prices fell to their lowest level in nearly two weeks on Wednesday as expectations of aggressive US monetary policy tightening supported the dollar and Treasury yields, shaking the appeal of bullion zero return.

Spot gold fell 0.2% to $1,946.92 an ounce at 0949 GMT, after hitting its lowest level since April 8. US gold futures fell 0.4% to $1,950.80.

Oil prices rebounded on Wednesday as a drop in U.S. oil inventories and concerns over tight supplies from Russia and Libya led to a rally from steep losses in the previous session.

Brent crude futures rose $1.46, or 1.4%, to $108.71 a barrel at 11:39 GMT.