Markets remain quiet to open the new year, with many celebrating holidays, carried forward from New Year. German markets opened the year on a positive note, boosted by a rise in Manufacturing PMI data, which was emulated in France and the EU. Manufacturing PMI improvement is welcome but remains heavily in contraction mode. Energy prices have eased, but the war in the Ukraine rages on, while a look at inflation in Germany is expected to improve. German CPI numbers are set to be released tonight, as other European and US markets open and join the New Year trading party. The US Dollar firmed, with the EUR drifting back to 1.0650, while the GBP held above 1.2000.
Australian and New Zealand markets remained closed for New Year celebrations and overseas trade in the currency markets had little impact. The AUD held above 0.6800, while the NZD drifted lower, struggling to trade above 0.6300. Markets will look at inflation data in Europe and the release of the Fed minutes on Wednesday, as guides for the opening 2023 trading week.