Summary:

• UK inflation slows down

• Bitcoin slumps as South Korea thread resurfaces

• European benchmarks benefit from the weakening of euro

During Asian session Chinese and Japanese equities posted solid gains. European benchmarks seem to follow into their footsteps with the German DAX gaining over 0.8% so far. USD is the strongest currency in G10 basket as it recovers after recent losses. Brent prices retreated below the $70 handle. 

The UK inflation rate slowed down in December for the first time in six months matching the economists’ consensus. The reading appears to suit the BoE’s latest projections foreshadowing a slowdown in consumer price growth this year.

Bitcoin took a hit over the course of the past hours as risks related to the South Korean thread came back again. To be precise, according to the country’s finance minister Kim Dong-yeon who appeared in an interview with local radio overnight prohibition of trading in digital currencies is “a live option” but the decision is subject to a thorough government review.

In the absence of the US session Asian stocks were doing pretty good on Tuesday as weaker yen boosted Japanese equities. European equities opened slightly higher following upbeat moods in Asia. Stocks from the Old Continent set for a bullish session as concerns over German coalition talks weigh on the euro.

The Asian session pushed the US dollar index lower, however it gained momentum against the Antipodean currencies and the Japanese yen. Notice that both AUD and NZD have made decent gains vs. the greenback of late hence a pullback is a natural thing. Nevertheless we got the two possible reasons behind a slide.

Remaining Tuesday’s economic calendar looks empty as the inflation figures from the European countries have been released in the morning. Yet we still have some semi-important data left ahead of us. In the afternoon NY Empire State Manufacturing Index print for January is going to be released showing the business condition in the state of New York. Oil traders may want to stay cautious as weekly API report on oil stocks takes the stage in the evening.