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Europe Roundup: Euro falls as stronger U.S. bond yields, dollar weighs, European stocks fall, Gold dips, Oil prices climb as COVID recovery, power generators stoke demand-October 18th, 2021

Posted at 18 October 2021 / Categories Market Roundups


Market Roundup

•China’s economy grew slower than expected in Q3- official data

• Dollar steadies on euro and yen

• Soaring inflation briefly sends NZD to 1-month high

• Bitcoin loiters near record peak

• Brent touches highest since Oct 2018, WTI highest since Oct 2014

Looking Ahead Economic Data (GMT)

•12:15 Canada Sep Housing Starts  255.0K forecast, 260.2K previous

•12:15 Canada August Foreign Securities Purchases   14.19B previous

•13:00 French 12-Month BTF Auction -0.641% previous

•13:00 French 3-Month BTF Auction-0.740% previous

•13:00 French 6-Month BTF Auction -0.675% previous

•13:15 US Sep Industrial Production (MoM)  0.2% forecast, 0.4% previous

•13:15 US Sep Capacity Utilization Rate  76.5% forecast, 76.4% previous

•13:15 US Sep Manufacturing Production (MoM)  0.1% forecast, 0.2% previous

•13:15 US Sep Industrial Production (YoY)  5.95% previous

•13:15 US Oct  NAHB Housing Market Index  76 forecast, 76 previous

•15:15 US 3-Month Bill Auction 0.050% previous

•15:15 US 6-Month Bill Auction   0.055% previous

•18:00 US Federal Budget Balance -171.0B previous

Looking Ahead - Events, Other Releases (GMT)

•15:40 Canada BoC Gov Council Member Lane Speaks BoC Gov Council Member Lane Speaks

Fxbeat

EUR/USD: The euro declined against dollar on Monday as soft economic data in China bolstered the dollar and prompted investors to sell euro. China's economic growth hit its slowest pace in a year in the third quarter, data showed on Monday, hurt by power shortages, supply chain bottlenecks and major wobbles in the property market. Dollar rose about 0.14% against the euro at 1.1580.  Immediate resistance can be seen at 1.1616 (20DMA), an upside break can trigger rise towards 1.1629(38.2%fib).On the downside, immediate support is seen at 1.1571(23.6%fib), a break below could take the pair towards 1.1500 (Psychological level).

GBP/USD: The British pound steadied against the dollar on Monday after Bank of England Governor Andrew Bailey sent a fresh signal that the central bank is gearing up to raise interest rates as inflation risks mount. During an online panel discussion on Sunday organised by the Group of 30 consultative group, Bailey said the BoE will “have to act” in its monetary policy meetings on the risk of medium term inflation.He continued to believe that the recent jump in inflation would be temporary, but that a surge in energy prices would push it higher and make its climb last longer. Investors were awaiting CPI September inflation data for Britain due on Wednesday. Immediate resistance can be seen at 1.3761(50%fib),an upside break can trigger rise towards 1.3848(61.8%fib).On the downside, immediate support is seen at 1.3678(38.2%fib), a break below could take the pair towards 1.3615(20DMA).

USD/CHF: The dollar strengthened against Swiss franc on Monday as soft economic data in China and climbing oil prices jangled investors' nerves that inflation will drive interest rates higher. China's economic growth hit its slowest pace in a year in the third quarter, data showed on Monday, with power shortages crimping factory output - while in commodities, crude prices rose more than 1% to test 2018 highs. Immediate resistance can be seen at 0.9273(23.6%fib), an upside break can trigger rise towards 0.9309 (Oct 13th high).On the downside, immediate support is seen at 0.9225(38.2%fib), a break below could take the pair towards 0.9188(50%fib).

USD/JPY: The dollar rose against yen on Monday after data showed slower-than-expected growth in China’s economy last quarter and surging oil prices fed inflation concerns. China’s gross domestic product grew 4.9% in the July-September quarter from a year earlier, its weakest pace since the third quarter of 2020. The world’s second-largest economy is grappling with power shortages, supply bottlenecks, sporadic COVID-19 outbreaks and debt problems in its property sector. The dollar index rose 0.1% to 94.102, edging it back toward last week's one-year high of 94.563.The dollar was last trading against yen at 114.35. Strong resistance can be seen at 114.55(23.6%fib), an upside break can trigger rise towards 115.00(Psychological level).On the downside, immediate support is seen at 113.95(38.2%fib), a break below could take the pair towards 113.50(50%fib).

Equities Recap

European shares fell on Monday after weaker-than-expected growth data from China hit luxury stocks, while a relentless surge in commodity prices fuelled worries about inflation spiralling out of control.

At (GMT 09:33 ),UK's benchmark FTSE 100 was last trading down at 0.21 percent, Germany's Dax was down by 0.44  % percent, France’s CAC   was last down by 0.75 percent.

Commodities Recap

Gold dipped on Monday, extending its steep sell-off from the previous session, as U.S. bond yields and the dollar strengthened.

Spot gold fell 0.2% to $1,764.22 per ounce by 0701 GMT, after Friday’s 1.6% slide. U.S. gold futures declined 0.2% to $1,764.70.

Oil prices hit multi-year highs on Monday buoyed by recovering demand and high natural gas and coal prices encouraging users to switch to fuel oil and diesel for power generation.

Brent crude oil futures were up 59 cents, or 0.7%, to $85.45 a barrel by 0900 GMT, after hitting $86.04, their highest level since October 2018.

U.S. West Texas Intermediate (WTI) crude futures climbed 90 cents, or 1.1%, to $83.18 a barrel, after hitting a $83.73, their highest since October 2014.


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