Europe Roundup: Sterling drifts higher against dollar, European stocks drop, Gold dips, Oil rises as investors focus on OPEC+ decision amid growing Omicron fears-December 2nd,2021

Posted at 02 December 2021 / Categories Market Roundups

Market Roundup

•Swiss Retail Sales (YoY)  1.2%,2.5% previous

• Italian Oct Monthly Unemployment Rate 9.1%  forecast, 9.2% previous

•EU Oct PPI (MoM)  5.4%,3.5% forecast, 2.7% previous

•EU Oct PPI (YoY)  21.9%, 19.0% forecast,16.0% previous             

•EU Oct Unemployment Rate 7.3%,7.3% forecast, 7.4% previous

 Looking Ahead Economic Data (GMT)

•12:30 US Nov Challenger Job Cuts  22.822K previous     

•13:00 Russia Central Bank reserves (USD) 626.3B previous         

•13:30 US Jobless Claims 4-Week Avg 252.25K previous

•13:30 US Initial Jobless Claims 240K forecast, 199K previous

•13:30 US Continuing Jobless Claims 2,000K forecast, 2,049K previous

•16:30 US 8-Week Bill Auction 0.045% previous

•16:30 US 4-Week Bill Auction 0.125% previous

Looking Ahead - Events, Other Releases (GMT)

•16:00 US FOMC Member Quarles Speaks

•16:30 US FOMC Member Daly Speaks

•16:30 US FOMC Member Bostic Speaks

•16:30 US FOMC Member Barkin Speaks


EUR/USD: The euro was little changed on Thursday as a lack of information about the Omicron variant of COVID-19 kept market cautious. Markets first dropped on fears over the Omicron variant on Friday last week, and since then have see-sawed as investors weighed up the possible impact of countries imposing new travel restrictions, amid signs that the new strain may be more contagious than previous variants. Immediate resistance can be seen at 1.1370(38.2%fib), an upside break can trigger rise towards 1.1450(61.8%fib).On the downside, immediate support is seen at 1.1286 (38.2 % fib), a break below could take the pair towards 1.1185(23.6%fib).

GBP/USD: Sterling firmed on Thursday as the discovery of the first case of the Omicron variant in the United States, but trading was choppy amid uncertainty about whether the Bank of England will hike interest rates this month. The BoE said in November it would probably have to raise rates from an all-time low of 0.1% "over the coming months", but policymakers have sounded increasingly divided on this prospect after the new coronavirus variant was detected. Sterling edged 0.2% higher to $1.3307 after hitting a fresh 2021 low of $1.3195 on Tuesday. Immediate resistance can be seen at 1.3342(38.2%fib), an upside break can trigger rise towards 1.3403(50%fib).On the downside, immediate support is seen at 1.3285 (23.6%fib), a break below could take the pair towards 1.3204(Daily low).

USD/CHF: The dollar initially gained against the Swiss franc on Thursday but gave up ground  as traders weighed the risks posed by a more hawkish Federal Reserve amid ongoing uncertainty about the threat from Omicron. Despite a rush by countries around the world to tighten border controls, Omicron has spread rapidly to places as far apart as Australia, Britain, Japan and the United States. The dollar index , which measures the currency against six major peers, edged 0.01% higher to 96.059.Immediate resistance can be seen at 0.9208 (38.2% fib), an upside break can trigger rise towards 0.9234(Ichimoku Cloud top).On the downside, immediate support is seen at 0.9172(50%fib), a break below could take the pair towards 0.9136(61.8%fib).

USD/JPY: The dollar strengthened against the Japanese yen on Thursday as dollar stabilized, helped by a rebound in benchmark Treasury yields from a more-than-two-month trough. The 10-year Treasury yield dipped to a two-month low at 1.4020% on Wednesday, before rising to 1.4409% in Asian trading on Thursday. That tick up in yields helped the dollar to stabilize from recent declines. Investors waited for clues on the threat posed by the Omicron coronavirus variant and the speed at which the Federal Reserve will taper stimulus in the United States. The U.S. dollar rallied 0.29% to 113.08 against Japan's currency. Strong resistance can be seen at 113.10(38.2% fib), an upside break can trigger rise towards 113.67 (23.6%fib).On the downside, immediate support is seen at 112.60(38.2%fib), a break below could take the pair towards 112.12(50%fib).

Equities Recap

European stock indexes opened lower on Thursday, reversing gains from the previous session as a lack of information about the Omicron variant of COVID-19 left markets volatile, and as investors also bet on faster Fed tapering.

At (GMT 11:09 ),UK's benchmark FTSE 100 was last trading down at 0.59 percent, Germany's Dax was down by 0.87 percent, France’s CAC finished was down by 0.61 percent.

Commodities Recap

Gold prices eased on Thursday as investors bet the U.S. Federal Reserve would taper its bond purchases faster to tackle surging inflation despite economic recovery concerns amid the new Omicron coronavirus variant.

Spot gold fell 0.3% to $1,777.87 per ounce by 0639 GMT. U.S. gold futures dropped 0.3% to $1,778.10.

Oil prices rose on Thursday, more than recouping the previous day's losses, as investors adjusted positions ahead of an OPEC+ decision over supply policy, but gains were capped amid fears the Omicron coronavirus variant will hurt fuel demand.

Brent crude futures rose $1.24, or 1.8%, to $70.11 by 0748 GMT, having eased 0.5% in the previous session.

U.S. West Texas Intermediate (WTI) crude futures gained $1.13, or 1.7%, to $66.70 a barrel, after a 0.9% drop on Wednesday.

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