EU Market Review 2nd June 2021

by Elina Nikolova

Gold traded higher than 1900 on Tuesday for a second consecutive week, registering new monthly highs at around 1916.00 area, before dropping below 1900.00. The precious metal hit its highest level in more than four months, as inflation concerns still outpace the expected economic growth. The price this morning is trading just below the 1900.00 psychological resistance level at around 1897.00. The MACD lines are above the zero line, with the MACD signal line crossed below the MACD line indicating a weakness. The price is still above the valid uptrend line formed from the March 31st bottom, indicating there is still bullish sentiment.
For the bulls, important resistance levels at 1900.00 psychological resistance level which coincides with Fibonacci 78.6 retracement of the last move, also at 1959.97 yearly high from January 6th and finally at 2000.00 psychological resistance level.
For the bears, support levels exist at 1875.50 inside support from Jan 21st top, at 1851.47 where the 0.618 Fibonacci retracement level lies, and finally at 1800.00 psychological support level.
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• It’s a busy day today in EU and the UK, with stats coming mainly from EU economic area. News include German Retail Sales, Spanish Unemployment figures, UK M4 Money Supply figures and EU Producer Price Index (PPI).

• European markets closed on an upbeat note on Tuesday with several benchmark indices from the region posting new all-time highs, amid rising optimism about global economic recovery.
The pan European Stoxx 600 climbed 0.75%. The U.K.'s FTSE 100 surged up 0.82%, Germany's DAX advanced 0.95% and France's CAC gained 0.66%, while Switzerland's SMI ended 0.63% up.

• Asian stock markets were mixed Tuesday as investors looked ahead to U.S. jobs data for reassurance the biggest global economy is improving following the previous month’s big hiring miss.

• Euro zone manufacturing activity expanded at a record pace in May, according to a survey on Tuesday which suggested growth would have been even faster without supply bottlenecks that have led to an unprecedented rise in input costs.
• IHS Markit's final Manufacturing Purchasing Managers' Index (PMI) rose to 63.1 in May from April's 62.9, above an initial 62.8 "flash" estimate and the highest reading since the survey began in June 1997.
• Euro zone inflation surged past the European Central Bank's elusive target in May, heightening a communications challenge for policymakers who will happily live with higher prices for now but may face a backlash from irate consumers.
Inflation in the 19 countries sharing the euro accelerated to 2% in May from 1.6% in April, driven by higher energy costs to its fastest rate since late 2018 and above the ECB's aim of "below but close to 2%", data from Eurostat showed on Tuesday.
• The Spanish government's budget deficit narrowed in April for the first time since the COVID-19 pandemic hit the country, Budget Minister Maria Jesus Montero said on Tuesday.

• At 06:00 (GMT) EU German Retail Sales m/m results are expected. This report measures the change in the total value of inflation-adjusted sales at the retail level, excluding automobiles and gas stations. It is released monthly, about 30 days after the month ends.
• At 07:00 (GMT) EU Spanish Unemployment Change is also due. This indicator measures the change in the number of unemployed people during the previous month. This indicates the change in the number of unemployed people during the previous month. The estimate is for a drop of -115.2K from the previous month.

• At 08:30 (GMT) UK M4 Money Supply m/m expected . This is a measure if the change in the total quantity of domestic currency in circulation and deposited in banks.

• At 09:00 (GMT) – EU Producer Price Index (PPI) is to be announced. This measures the change in the price of finished goods and services sold by producers.

European indices yesterday:

• DAX: +0.95%
• EURO: +0.80%
• MIB: +0.60%
• CAC: +0.66%

Sources: Investing.com, forexfactory.com, nasdaq.com.