It’s been a fascinating begin to trading on Tuesday, indulging in lacklustre session in the beginning each week driven largely from the Presidents day bank holiday inside the US.
European equity markets happen to be buoyed this morning using a choice of PMIs to the eurozone, Germany and France which pointed to much stronger growth inside the region than was expected, particularly in France that has for a long period been a drag upon the region.
It might appear that confidence inside the euro area economy is finally upon the rise and growth could finally grab coming from the rather subdued rates we’ve seen in recent years, and that is particularly surprising as long as we’re entering a period of heightened political uncertainty.
The uptick inside the French services sector was both welcome and surprising as long as we’re only a couple of months far from an election during which the current front-runner – albeit only to begin with round of voting – wishes to withdraw the nation coming from the eurozone and threaten dismantling the project altogether.
While sentiment can be ease once we approach the election itself and possibly beyond, it’s certainly encouraging because it would suggest the foundations may well finally have place for any stronger recovery inside the region should it overcome the political hurdles facing it in 2017, not including Brexit which should likely persist for for much longer.
Regardless of the boost coming from the data this morning, the euro will be upon us soon under pressure this morning, particularly against the which is given a boost itself by a rise in hawkish commentary from Fed officials that has forced investors to re-evaluate their expectations to the March meeting.
Expectations for any rate hike in the meeting remain quite low but they‘ve picked up considerably and recent comments from Patrick Harker who claimed a rate hike in March Isn‘t from the table – echoing similar views of other officials including Chair Janet Yellen last week – are driving these moves.
We’ll hear from three Fed officials throughout today’s session – including Harker who is a result of speak again this afternoon – which can shed further light, particularly upon the March meeting.
Of another two officials, Neel Kashkari is likewise a voter upon the FOMC in 2012 while John Williams will have 2018.