Good morning.

The FP Markets research team produce First Light News around the European open, ensuring traders and investors have the news needed to begin their day.

Overnight Highlights

Major US equity indices concluded Tuesday on strong footing; the Dow Jones Industrial Average added 1.09%, the S&P 500 added 1.46% and the Nasdaq 100 climbed 1.59%. It was also a positive session across all 11 S&P 500 Sectors. Consumer discretionary took the lead, rallying 2.29%, with utilities lagging by 0.74%. In terms of individual equities, General Motors (GM) rallied 8.35% and United Parcel Service (UPS) climbed 4.67%, after both companies reported better-than-expected quarterly results.

Tier-1 economic data for Tuesday was centred largely on US (Conference Board) consumer confidence. Despite softening inflation, consumer sentiment deteriorated in January, declining to 107.1 (vs. 109.0 expected).

Early trading overnight on Wednesday witnessed Asia Pacific equity indexes wrap up in positive territory, with the Nikkei 225 adding 0.07%, South Korea’s KOSPI advancing 1.02% and Australia’s ASX 200 rising 0.33%.

Markets Today

European markets delivered a modest risk-on vibe in early trading. The Euro Stoxx 50 currently leads major European indices, up 0.30%, followed by the UK’s FTSE 100 at 0.20%.

The day ahead welcomes an eventful economic calendar, with most of the focus leaning towards the FOMC rate decision. The FOMC are poised to slow the pace of policy tightening today, raising the Federal Funds target range by 25 basis points, following the 50 basis-point increase in December.

Tier-1 Economic Data in Focus:

Annual Inflation Rate for the Euro Area for January at 10:00 am GMT (Expected: 9.0%; Previous: 9.2%).

US ADP Non-Farm Employment Change for January at 1:15 pm GMT (Expected: 176,000; Previous: 235,000).

US ISM Manufacturing PMI for January at 3:00 pm GMT (Expected: 48.0; Previous: 48.4).

US Federal Reserve (FOMC) Rate Decision at 7:00 pm GMT (Expected: 25bp Increase).

Markets as of 8:50 am GMT:

Currency Markets:

EUR/USD: $1.0883 +0.17%

GBP/USD: $1.2316 -0.03%

AUD/USD: $0.7080 +0.39%

USD/JPY: ¥130.11 +0.05%

NZD/USD: $0.6448 +0.13%

USD/CAD: C$1.3298 -0.06%

USD/CHF CHF0.9159 -0.06%

Commodity Markets:

XAU/USD spot: $1.952 -0.13%

XAG/USD spot: $23.556 -0.75%

WTI Oil spot: $79.57 +0.68%

Brent Oil spot: $86.00 +0.64%

US Yield Rates (Market Closed):

US 2-Year Note: 4.1950% -0.29%

US 5-Year Note: 3.5999% -0.99%

US 10-Year Note: 3.4830% -1.31%

US 30-Year Bond: 3.6070% -1.49%

Cryptocurrency Markets:

BTC/USD: $22,991 +0.10%

ETH/USD: $1,571 +0.10%

LTC/USD: $96.06 +1.61%

XRP/USD: $0.40067 +1.27%