The US$ has generally remained under pressure on Tuesday, trading mostly on the back of the PMIs with little other data to provide any direction. From the EU, the PMI manufacturing was finalized at 60.6 in December, unrevised from the previous month, while the Germany PMI manufacturing was finalized at 63.3, also unrevised. The French PMI manufacturing was revised lower to 58.8. The only real move came in the UK Mfg PMI which fell to 56.3 in December, down from 58.2 and missed expectation of 57.9 but at the same time remains well above the long term trend and thus underpinned Cable through the day. Commodities continue to trade on a firm note, with Gold now enjoying its longest winning streak since the end of the gold standard in 1971, underpinned largely by the weaker dollar. WTI is unchanged, but not before reaching its highest level since 2015. The stock markets have had a positive session to start the year, underpinned by gains in the big technology and consumer discretionary stocks
Wednesday will see little economic data from Asia apart from the Australian HIA New Home Sales, or Europe, where the German Unemployment (exp -11K, 5.5%) and the UK Construction PMI will be the main focus. Things will liven up in the US session though with the release of the December ISM Mfg PMI (exp 58.1) and Prices Paid (exp 65.0). These figures will be closely followed by the November Construction Spending and Total Vehicle Sales, which in turn will arrive ahead of the latest FOMC Minutes, at which the Fed are likely to remain constructive about the near-term inflation outlook but less so when considering the longer term. In other data, oil traders will be looking to the API weekly Crude Oil Stock Inventory, while also keeping an eye on the current political tensions in Iran.
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