US equity markets are on course to open flat on Tuesday following a decent start in Europe where indices are currently posting moderate gains.
EUR and GBP gain on multi-year highs for UK and eurozone manufacturing PMIs
Europe has been given a boost this morning by the better than expected April manufacturing PMI data for the eurozone and the UK. The final eurozone PMI release hit a six year high while the UK rebounded from three months of declines to record its fastest growth in three years. Both currencies are making decent gains this morning on the back of the data and could test last week’s highs, with both trading near key technical resistance levels. A break of these could spur further gains in the coming weeks.
French election to remain in focus ahead of this weekend’s vote
While traders continue to have one eye on the data, the French election is likely to remain at the forefront of their minds this week, with the second round of voting taking place this weekend. Emmanuel Macron remains the runaway favourite in the polls which is supporting risk appetite at the moment but traders may retain a slightly cautious approach given the experience of last year’s voting in the UK and the US.
Fed decision key this week despite rate hike being all but priced out
Earnings season continues to be another key focus for investors and this week we’ll also get the latest monetary policy decision from the Federal Reserve as well as the April jobs report. While a rate hike at the meeting tomorrow is all but priced out, the probability of one at the meeting in June is currently just shy of the 70% level that is widely seen as the threshold for such a move. Tomorrow’s statement will therefore be very closely monitored in the absence of a press conference from Chair Janet Yellen.
For a look at all of today’s economic events, check out our economic calendar.