Here's a preview of the top 3 things that could rock markets today:
1. Fed Minutes, Housing, Manufacturing, Service Data To Keep Dollar Rebound Alive?
The Federal Reserve publishes Wednesday the minutes of its January meeting at which the central bank voted to keep its benchmark rate unchanged but adopted a more hawkish tone in its monetary policy statement, citing improving inflation.
RBC suggested that the subtle change in the Fed’s language on inflation may have been a deliberate effort by the central bank to open the door to a more “forceful tone on rate hikes” as the year progresses.
A trio of reports on services, manufacturing, and housing are also expected to draw investor interest for clues on the underlying strength of the US economy.
Existing Home Sales for January is expected to show a rise of 0.9% in January to 5.6m.
The dollar continued its rebound Tuesday as an uptick in US debt issuance slated for this week, pressured Treasury prices, sending bonds yields surging.
2. Crude Oil Prices Settle Higher as Cushing Inventories Decline
Traders look ahead to a fresh batch of crude oil inventory data from the American Petroleum Institute due Wednesday.
The American Petroleum Institute reported crude oil stockpiles unexpectedly fell by 1.05 million barrels for the week ended Feb. 16.
Crude oil futures settled higher on Tuesday as investors cheered upbeat commentary on oil market rebalancing while data showing Cushing inventories declined lifted sentiment.
3. The Pound Attempts Test of $1.4 Against Greenback Again
A raft of UK economic data is slated to hit the wires on Wednesday which could draw a sharp reaction in sterling against the dollar.
Data from the Office for National Statistics is expected to show, average weekly earnings grew by 2.5% in December, in-line with wage growth in the previous month.
Investors will also look for clues about future inflation expectations, when the Bank of England releases inflation report hearings, with a speech by BoE governor Mark Carney likely to garner added attention following investor expectations that the central bank is poised raise rates sooner rather than later.
GBP/USD remained steady against the dollar after a Reuters reported, citing unnamed sources, that the European Parliament is working on a proposal calling for the European Union to negotiate an "association agreement."
The agreement was said to give Britain "privileged" access to the single market and membership agencies.