European Stocks Rise on Strong Earnings, UK Economy Growth, and Lingering Debt Concerns"
European stocks saw gains, driven by strong earnings, particularly from luxury group Richemont, which reached a record high after surpassing expectations. The pound also rose as UK economic growth in the first quarter reduced the risk of a recession.
Personal-care shares in Europe were boosted by Richemont's performance, with the company reporting a rebound in sales in China following the relaxation of Covid Zero policies
In the UK, gross domestic product (GDP) increased by 0.1% in the first quarter compared to the previous quarter, according to the Office for National Statistics. March showed a contraction of 0.3% after no change in February and a small gain in January, which was revised upward.
US data revealed that initial jobless claims reached their highest level since October 2021, while producer prices rose less than anticipated. The annual producer inflation in the US continued to ease for the tenth consecutive month, reaching 2.3% in April 2023, the lowest since January 2021. This suggests that Federal Reserve policy tightening may be starting to have an impact.
Concerns over national debt persist, with Treasury Secretary Janet Yellen scheduled to discuss the impasse of raising the government debt ceiling with members of the Bank Policy Institute lobby group next week.
The postponement of a meeting between President Joe Biden and top lawmakers raises investor concerns, as the federal government could potentially run out of money to meet its obligations by June 1 if the debt ceiling is not raised.
In the US banking sector, PacWest Bancorp has become the latest to face investor criticism after reporting a decline in deposits and posting additional collateral to the Federal Reserve to enhance liquidity.
EUR/USD
stays dangerously close to 1.0900 A four-hour close below 1.0900 should bring in additional sellers and open the door for an extended slide toward 1.0880 wich represents the down parallel on the actual bearish channel formed.
Resurfacing fears over a deepening banking crisis in the United States caused investors to stay away from risk-sensitive assets on Thursday. Consequently, the US Dollar (USD) outperformed its rivals despite the disappointing weekly Initial Jobless Claims and lower-than-expected April Producer Price Index (PPI) data.
Key resistance levels to monitor for potential upward movements in the EURUSD pair are located at 1.0930, 1.0945, and 1.0960. Conversely, significant support levels to keep an eye on for potential downward movements are situated at 1.0900, 1.0850, and 1.0800.
