Europe roundup: Euro edged higher but still focused on Ukraine, European equities gain, gold subsides, oil tumbles as Russia, oil supply fears Ukraine fade-February 23, 2022

Market overview

• German GfK Consumer Sentiment in March -8.1, -6.3 forecast, -6.7 previous

• French business survey February 112, 112 forecast, 112 previous

• EU Jan CPI (Annual) 5.1%, forecast 5.1%, previous 5.1%

• EU Jan CPI (monthly) 0.3%, 0.3% forecast, 0.4% previous

• EU Jan Core CPI (YoY) 2.3%, 2.3% forecast, 2.3% previous

Forward-looking economic data (GMT)

•13:30 Canadian Corporate Profits (TQ) 2.8% previous

• 13:55 Red Book (Annual) 15.4% previous

Future Outlook – Events, Other Releases (GMT)

•4:00 p.m. Schnabel of the ECB speaks

• 5:00 p.m. Tenreyro, member of the British MPC, takes the floor

fxbeat

EUR/USD: The euro rose slightly against the dollar on Wednesday as investors braced for further developments in the Ukraine crisis after Western countries announced sanctions against Russia for sending troops to breakaway regions. The single currency recorded a slight rebound on Tuesday as it neared its lowest since Feb. 3, when the European Central Bank’s hawkish turn pushed its exchange rate higher. The euro rose 0.1% against the dollar to $1.1340 after hitting its lowest Tuesday since Feb. 14 at $1.1286. Immediate resistance can be seen at 1.1354 (38.2% fib), a break up can trigger a rise towards 1.1362 (61.8% fib) On the downside, immediate support is seen at 1.1333 ( 5DMA), a break below could take the pair towards 1.407 (38.2% fib).

GBP/USD: The pound rose slightly on Wednesday as investors waited to see how Russian President Vladimir Putin would react to Western sanctions over the standoff with Ukraine. British Prime Minister Boris said on Monday he would end all coronavirus restrictions in England, including mandatory self-isolation for people with COVID-19. Investors are also expecting Bank of England (BoE) Governor Andrew Bailey, Deputy Governor Ben Broadbent and two others. Speeches by BoE members in parliament later in the morning. The pound rose 0.1% against the dollar to hit $1.3606 at 0930 GMT, after hitting a six-day low the previous day. Immediate resistance can be seen at 1.3603 (38.2% fib), a break up can trigger a rise towards 1.3651 (23.6% fib). On the downside, immediate support is seen at 1.3566 (50%fib), a break below could take the pair down to 1.3528(61.8%fib).

USD/CHF: The dollar edged higher against the Swiss franc on Wednesday as the dollar regained its footing as investors awaited further developments on the Ukraine crisis, while also bracing for impending policy tightening from major central banks. Western nations on Wednesday imposed new sanctions on Russia for sending troops into breakaway regions of eastern Ukraine and threatened to go further if Moscow launched an all-out invasion of its neighbor. Federal Reserve officials last week dampened growing market expectations for an aggressive initial response to US inflation, which has been high for 40 years, signaling that steady interest rate hikes should be enough. Immediate resistance can be seen at 0.9209 (50% fib), a break up can trigger a rise towards 0.9473 (38.2% fib). On the downside, immediate support is seen at 0.9182 (38.2%fib), a break below could take the pair towards 0.9150(23.6%fib).

USD/JPY: The dollar strengthened against the yen on Wednesday as demand for the safe-haven yen waned as investors waited to see Russian President Vladimir Putin’s next move after sending troops to breakaway regions of Ukraine. The initial push to send troops to Donetsk and Luhansk this week has triggered coordinated but modest sanctions from Western countries, but with the prospect of more to come if Moscow seeks to push deeper into the country. The dollar last traded up 0.32% against the Japanese yen at 115.02. at 114.90 (50% fib), a break below could take the pair towards 114.49 (23.6% fib).

Summary of actions

European stocks rose on Wednesday, buoyed by strong earnings reports, as investors took stock of Western sanctions against Moscow over its standoff with Ukraine.

At (12:00 GMT), Britain’s benchmark FTSE 100 was last trading at 0.28%, Germany’s Dax was up 0.53%, France’s CAC was up 0.82% for the last time.

Summary of raw materials

Gold plunged on Wednesday as riskier assets rebounded as bullion investors awaited further developments on the Ukraine crisis, while also bracing for impending policy tightening from major central banks.

Spot gold fell 0.2% to $1,894.82 an ounce at 10:35 GMT, falling from a nearly nine-month high of $1,913.89 hit on Tuesday. US gold futures fell 0.6% to $1,896.10.

Oil prices fell on Wednesday, retreating from seven-year highs hit the day before, as it became clear that the first wave of US and European sanctions against Russia were unlikely to disrupt oil supplies.

Brent crude fell 59 cents, or 0.6%, to $96.25 a barrel at 10:27 GMT, after hitting $99.50 on Tuesday, the highest since September 2014.

U.S. West Texas Intermediate (WTI) crude futures fell 76 cents, or 0.8%, to $91.15 a barrel, after hitting $96 on Tuesday.

Garland K. Long