US Fed minutes in focus amid Ukraine tensions
Yesterday saw a slight improvement in risk appetite as newsflow indicated an easing of geopolitical tensions in relation to Ukraine. In Europe, the Euro Stoxx 50 was up 2% on the day. At the closing bell on Wall Street last night, the S&P 500 had gained 1.6%.
Currency-wise, the narrow trading continued amongst the major pairs. Of the limited moves to register, the euro was modestly firmer coinciding with the aforementioned Ukraine newsflow.
As we get underway this morning, EUR/USD has edged beyond the midpoint of $1.13-1.14 and EUR has regained some ground against GBP, opening this morning nearer to 84p. Markets will continue to pay close attention to geopolitical developments today, however, there is also a hefty macro data diary to contend with. UK CPI inflation figures for January were the first released earlier, with the headline number printing in line with expectations at 5.5%.
Later today the US will be under the spotlight as we see the release of retail sales data as well as the Fed minutes (after European close). Traders will keep a keen eye on any Fed announcements as they speculate on the magnitude of the rate hike expected from the central bank in March.