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Gold slips as interest rate expectations sap appeal

 

“Lean forward into your life. Begin each day as if it were on purpose.” ―Mary Anne Radmacher 

 

 

HEADLINES

 

  • Pound strengthens as traders assess interest rate prospects
  • Gold slips as interest rate expectations sap appeal
  • Oil rises as tight supply trumps recession fears
  • Energy shares boost European equities but recession fears cap gains
  • EUR/GBP to see strength back to 0.8722 and eventually 0.8861/76 – Credit Suisse
  • GBPJPY Near Term: Upside favored

 

 

 

Pound strengthens as traders assess interest rate prospects 

 

The British pound rose against the dollar and euro on Monday, pulling away from two-week lows as risk sentiment improved and traders focused on any signals that the Bank of England could raise interest rates faster than expected.

At 1413 GMT the pound was up 0.31% against the dollar at $1.21330 . It was also stronger against  the euro, rising 0.17% to 86.050 pence.

As risk sentiment picked up in global FX markets, the pound also rallied against so-called safe-haven currencies, the Swiss franc and Japanese yen.

 

 

COMMODITIES

 

Gold slips as interest rate expectations sap appeal 

 

Gold fell on Monday as prospects of higher interest rates dimmed appeal for the non-yielding asset, but a softer dollar helped bullion to cling above the $1,800 support level.

Spot gold fell 0.2% to $1,807.40 an ounce by 1311 GMT, having touched a five-month low of $1,783.50 on Friday.

U.S. gold futures rose 0.4% to $1,809.00.

The U.S. dollar was down 0.2% but held close to a two-decade high reached last month.

 

 

ENERGY

 

Oil rises as tight supply trumps recession fears 

 

Oil rose on Monday as supply concerns driven by lower OPEC output, unrest in Libya and sanctions against Russia outweighed fears of a demand-sapping global recession.

Euro zone inflation hit yet another record high in June, strengthening the case for rapid European Central Bank rate increases, while U.S. consumer sentiment hit a record low.

Brent crude rose $2.26, or 2%, to $113.89 a barrel by 12:47 p.m. ET (1648 GMT) after falling more than $1 in early trade. U.S. West Texas Intermediate (WTI) crude rose $2.20, or 2%, to $110.63, in thin volume during the U.S. Independence Day holiday.

 

 

 

STOCKS

 

Energy shares boost European equities but recession fears cap gains 

 

European shares rose on Monday as the oil and gas sector marked its best session in two months, while bleak euro zone investor morale kept sentiment in check ahead of the European Central Bank's plan to start hiking interest rates this month.

The continent-wide STOXX 600 index (.STOXX) was up 0.5% after falling last week on worries about a potential global economic slowdown. Volumes were subdued due to a U.S. market holiday.

ondon-listed oil giants BP Plc (BP.L) and Shell (SHEL.L), and France's TotalEnergies (TTEF.PA) jumped between 4.6% and 4.4%. They were the biggest boost to the STOXX 600 as supply concerns driven by lower OPEC output, unrest in Libya and sanctions on Russia lifted crude prices.

 

 

ANALYSIS

 

EUR/GBP to see strength back to 0.8722 and eventually 0.8861/76 – Credit Suisse 

 

“Key resistance remains seen at the recent and April 2021 high at 0.8722, with the 50% retracement of the fall from September 2020 at 0.8747. Beyond here in due course should then add weight to our view that a broader basing process is underway, with resistance seen next at the ‘neckline’ to the 2020 top and 61.8% retracement at 0.8861/76.” 

“Below 0.8550 can see the uptrend break sustainably for a fall back to next support at 0.8514/11, which coincides with the rising 55-day average, which we would look to hold if reached.”

 

 

CHART

 

GBPJPY Near Term: Upside favored

 

Technical View: Long position above 162.85. Target 165.2. Conversely, break below 162.85, to open 161.8.

Comments: The pair is expected to resume descend after correction.

 

 

 

Source: Trading Central 

 

 

CALENDAR

 

*Times in GMT

 

 

 

Source: FX Street Economic Calendar


 

 

SOURCES

 

https://www.reuters.com/markets/europe/pound-strengthens-traders-assess-interest-rate-prospects-2022-07-04/
https://www.reuters.com/article/global-precious/precious-gold-slips-as-interest-rate-expectations-sap-appeal-idUSL4N2YL1KD
https://www.reuters.com/business/energy/oil-slips-recession-fears-balance-tight-supply-2022-07-04/
https://www.reuters.com/markets/europe/energy-shares-boost-european-equities-ahead-inflation-data-2022-07-04/
https://www.fxstreet.com/news/eur-gbp-to-see-strength-back-to-08722-and-eventually-08861-76-credit-suisse-202207041338

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