There is a load of data due out in the eurozone, UK and US that could help to alter this weaker sentiment. Data is expected to show uneven and diverging patterns of growth between countries, but reaction to the figures will be based on the matter of degree countries’ growth paths diverge. If France sees the pace of contraction increase, while expansion gains in Germany, then the euro could face some selling pressure. Sterling faces a consumer demand gauge for the month of January. The rate of ILO unemployment fell close to the central bank’s target coming in at 7.1 per cent. A rate increase appears closer –this has helped to push sterling to fresh one-year highs against the euro and three-week highs against the US dollar.

Sterling

Policymakers said that sharp fluctuations in sterling are unwelcome and reiterated Carney’s comments that the central bank would not increase interest rates even if unemployment reached seven per cent. That is important given that the ILO rate of unemployment reached 7.1 per cent in November. The claimant count continued to fall, although by not as much as forecast at 24k. And, lastly, public finance figures were better than expected. The improvements seen in the employment sector helped push sterling to fresh one-year highs against the euro and three-week highs against the US dollar.

US dollar

The data calendar finally picks up in the US where weekly jobless claims, leading economic indicator, existing home sales and a flash PMI manufacturing survey will all be released. At a glance, none of the expected outcomes are likely to spook markets; rather, the data is likely to continue confirming the view that the Federal Reserve will continue its taper.

Euro

Investors shrugged off the German ZEW investment sentiment survey that dipped, but stayed near eight-year highs. Spain’s borrowing costs fell close to levels not seen in eight years. PMI flash estimates will be released across the eurozone. The data will be followed by consumer confidence figures. Investors will be keen to learn whether France has been able to reverse the pace of contraction in both manufacturing and the service sectors, while expecting German expansion to pick up. The January figures will give markets the first glimpse of how Q1 growth will look like for the eurozone.

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