Market today was mainly driven by the risk trends, with a major turnaround in the risk sentiment witnessed following China’s announcement of measures to lift the local stock markets, which in turn, helped the risk-recovery. Meanwhile, the Italian political and Saudi-related headlines continue to drive the risk sentiment.
The Yen lost ground on better risk appetite and pushed the USD/JPY pair to near 112.55 levels, and both the EUR and the GBP trading modestly flat, awaiting fresh political headlines and macro news.
Markets eagerly await some action in Wednesday’s European session, as a raft of Euro area flash manufacturing and services PMI reports will start dropping in from 07:15 GMT. Also, the UK second-tier BBA mortgage approval data is due at 08:30 GMT. However, the key focus will be on the UK PM Theresa Mays address to the British parliament on the Brexit deal, as concerns over the Irish backstop deadlock linger.
The NA session also remains quite eventful, with the US Markit manufacturing and services PMIs, and US EIA fuel stocks report.
Gold prices slipped on Wednesday morning in Asia from three-month highs in the previous session, driven by the intensifying geopolitical tensions, led by Saudi Arabia’s involvement in the murder of a journalist and Italy’s problematic budget, which the European Commission rejected on Tuesday, marking the first time the EU refused to accept a government’s spending plans.
Oil prices rebounded on Wednesday after plunging as much as 5% in the previous session as Saudi Arabia said it would keep markets supplied despite the upcoming U.S. sanctions against Iran. Crude Oil inched up to $66.58 per barrel and Brent Oil Futures traded to $76.72 a barrel.