The European session was quiet yesterday and the major indices finished fractionally in the red. 

Eurozone stocks registered modest gains earlier in the session, but the steam ran out of the bullish move.

Yesterday, Mario Draghi, the head of the European Central Bank said an interest rate hike could be delayed in order to assist the region. The euro-area is struggling and given that the ECB recently announced plans to launch another targeted lending scheme to begin in September, the prospect of higher seems a long way off. Inflation is being watched by the ECB, and Spain will release its CPI rate at 8am (UK time) and that consensus estimate is 1.5%, and that would be a big improvement from the 1.1% registered in February. German CPI will be released at 1pm (UK time) and economists are expecting the rate to slip to 1.6% from 1.7%.

The major US indices finished a little lower as investors remain worried about the prospect of a recession. The US 10-year yield dropped to its lowest level since mid-December 2017, and that underlines the risk-off sentiment.

It was reported that the US-China trade talks are going well, and progress has been made in the field of forced technology transfers. US treasury secretary, Steve Mnuchin and trade representative Robert Lighthizer will fly to Beijing today to continue talks. Despite the progress made, stocks in Asia are in the red as investors worried about US bond yields.

The final reading of fourth-quarter US GDP will be released at 12.30pm (UK time) and economists are expecting the reading to be adjusted down to 2.4% from 2.6%. The update will be closely watched in light of the lower growth forecast for 2019, not to mention the fear of a recession on account of the inverted yield curve. The latest jobless claims report will be announced at the same time and traders are anticipating a reading of 225,000.

The Brexit circus continues and after last night’s indicative voting, we are none the wiser about what MPs actually want. Eight proposals were put forward to try and find a way out of the gridlock, but not one proposal could obtain a majority. Earlier in the evening, Prime Minister May said she would resign if lawmakers were to back her withdrawal agreement – which has already been voted down twice. Mrs May might need to make her withdrawal agreement ‘substantially different’ before she gave bring it back for a third time.

Palladium suffered its largest percentage daily move in over two years yesterday. The metal racked up a series of all-time highs in recent months, and yesterday the CEO of Anglo American, warned the commodity is in a bubble. Platinum, sliver, and gold all lost ground too, and no doubt the firmer US dollar played a role too.

Oil lost ground yesterday after the Energy Information Administration report showed that US stockpiles jumped by 2.8 million barrels, while the consensus estimate was for a decline of 1.2 million barrels. There is been a lot of chatter about supply being curbed lately, but the nervousness about the global economy, and in turn demand is worth noting too.  

Today, we will hear from three Federal Reserve members, Randal Quarles, Richard Clarida and Michelle Bowman are expected to speak at 11.15am (UK time), 1.30pm (UK time) and 2pm (UK time) respectively. 

US pending homes sales will be posted at 2pm (UK time) and economists are expecting 0.7% growth, which would be a big drop from the 4.6% growth rate in January.

EUR/USD – has been broadly pushing lower since early January, and if the negative move continues it might retest the 1.1176 area. Resistance might be found at 1.1448.  

GBP/USD – has been driving higher since early December, and if it holds above the 200-day moving average at 1.3000, it might retest the 1.3380 area. The 1.2775 area region might act as support.

EUR/GBP – while its holds below the 200-day moving average at 0.8840, its outlook is likely to be negative. 0.8471 might act as support. A rally might encounter resistance at 0.8800.  

USD/JPY – has been edging lower since the start of the month and a break below 109.50 might bring 108.50 into play. If the wider rally continues, it might retest the 112.00 area.

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