Summary:

  • Eurozone inflation slows down in line with expectations

  • Bitcoin is back below $11k mark

  • Investors await US GDP data

Wednesday morning was quite interesting mainly due to the macro readings from the EMU economies that showed a mediocre results. Stocks in Europe remain under pressure after wave of selling hit US and Asian markets. AUD is the strongest currency among its G10 peers while GBP underperforms. Gold trades at a little premium while oil prices post minor declines ahead of weekly government report on inventories.

The newest data on inflation coming from the European economy showed that price growth eased the third month in a row reflecting mainly adverse base effects and matching the consensus. The weakest growth since 2016 seems to offer President Draghi more reasons to water down hawkish remarks expressed by some members of the Governing Council.

After striking a $11k mark the Bitcoin price has retreated below this level in early trading, however, the base scenario seems to still bode well for cryptocurrency buyers. From a technical point of view nothing has changed since Tuesday, hence a bullish candlestick (a morning star) is expected to play a major role over the next couple of days. Nonetheless, the latest stories related to the cryptocurrency block turned out to be equivocal.

Michel Barnier, EU’s chief Brexit negotiator, stated that the EU’s aim when it comes to the UK post-Brexit transition period is to keep it short and clearly specified. Having that in mind, one can see that this is a significant divergence between what EU wants and what UK wants as UK business urges PM May to prolong the two-year period.

Looking at the currency market one may notice that the Japanese currency is the sole one strengthening against the greenback in the morning in spite of the fact that there were two disappointing macroeconomic readings from the domestic economy for January.

Wednesday’s economic calendar looks flooded with important releases from both Europe and US. Inflation data from the EMU economies has been released in the morning. Now investors’ attention turns to the US preliminary GDP print and weekly report on oil inventories.