A steady stream of economic data will flow through the financial markets on Wednesday, giving investors the latest insights on developments in the Eurozone and United States.
A slew of PMI reports will make headlines in European trading, with IHS Markit set to report on manufacturing and services for key regional markets. The data releases begin at 08:00 GMT, and will feature French, German and Eurozone PMI numbers.
The Eurozone flash manufacturing PMI for January is expected to dip slightly to 60.3 from a previous reading of 60.6. The services index is projected to come in at 56.4, down from 56.6. The Composite PMI gauge, which tracks manufacturing and services, is forecast to edge up to 58.3 from 58.1.
On the PMI scale, anything above 50 signals expansion in economic activity.
Shifting gears to the United Kingdom, the Office for National Statistics will report on employment at 09:30 GMT. The monthly report will feature the latest data on the claimant count rate, average hourly earnings and the unemployment rate. The ILO unemployment rate is forecast to hold steady at 4.3% in the three months through November.
Markit will also provide the latest PMI numbers for the United States beginning at 14:45 GMT. The US manufacturing and services sectors are forecast to grow at a steady pace through the first month of the year. The Composite PMI is expected to come in at 53.1, down from 54.1 in December.
Meanwhile, the National Association of Realtors (NAR) will report on existing home sales at 15:00 GMT. The sale of previously owned homes is forecast to drop 2.2% to a seasonally adjusted 5.7 million in December.
In the energy markets, oil traders will be keeping a close eye on weekly crude inventory data courtesy of the US Energy Information Administration (EIA). The EIA report is expected to show a weekly drawdown of 1.3 million barrels in the period ended 19 January.
EUR/USD
The euro enjoyed a broad rally on Tuesday, as the dollar continued to backtrack against a basket of peers. The EUR/USD exchange rate was last seen trading at 1.2313 for a gain of 0.1%. The pair’s next target is coming up at 1.2350.
GBP/USD
The British pound capitalized on a weaker dollar Tuesday to climb above 1.4000 US for the first time since the Brexit debacle. The GBP/USD was up again in Asian trade, climbing 0.3% to 1.4036. The market is now eyeing the psychological 1.4050 level as the next target
UK OIL
Oil prices continued higher on Tuesday, with the international benchmark climbing back above $70 a barrel on London’s ICE futures exchange. At last check, Brent was trading slightly below $70. The outlook remains highly favourable as global producers continue to drain excess supplies from the market.
