What is it? It checks the interest rate at which the BOE lends to financial institutions overnight.

Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.

When? January 8th at 7:00am Eastern Time.

 

 

Trading Tip: If the number is higher than the forecast, you can expect the GBP to rise.

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US stocks dropped for a fifth day. Falling oil prices continued to knock sentiment pushing investors to less risky assets.  Negative data was also released.

Asian markets climbed across the region. The Nikkei added 0.01% as the Dollar climbed against the Yen. The Hang Seng added 0.83% due to a possible technical rebound after falling a day earlier.

European markets are higher today due to hopes of increased stimulus. The yearly CPI declined by 0.2% and such a weak figure hasn’t been seen since September 2009. This places more pressure on Mario Draghi, the President of the European Central Bank, to make changes at the next meeting taking place on January 22.

Oil dropped to a fresh 6 year low of 46.8/barrel. The pressure of increasing supplies and lower demand is having a big impact on the market. A slight rebound was seen after the EIA released that inventories declined by 3million barrels over the past week but the price is still trading below $50/barrel.

Gold climbed as a safe haven asset. The stock market also declined as investors ditched riskier assets. The price declined slightly on the back of positive U.S data but it seems as though the market is awaiting the FOMC meeting minutes. Traders are looking for clues regarding an interest rate hike which seems more and more likely. If hawkish comments are made, the metal becomes more undesirable and we could see it drop back down.

 

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Here are 4 tips for today's trading. This will help you decide where you should invest and what to look for:


1) Oil Falls, Stocks Hold Steady

US stock futures are pushing higher and global markets are mostly moving up after a few punishing days.

But keep an eye on oil prices: Crude futures in the US keep shifting lower and are now trading near $47 per barrel. The price of crude has more than halved since June as rising supply outstripped faltering demand.


2) Deflation in Europe

Official data shows consumer prices across the eurozone fell by 0.2% in December, marking the first time prices have fallen in the region since the Great Recession in 2009.

The figure was worse than most analysts were expecting. Eurozone inflation stood at 0.3% in November.

Falling prices could herald worse times to come for Europe's stagnant economy because they can encourage people and companies to hold off making purchases in the hopes of cheaper deals in the future.

The negative inflation numbers will also increase pressure on the European Central Bank to launch quantitative easing. The euro is stuck at a nine-year low against the dollar.


3) Expecting Earnings and Economic Data

Monsanto (MON) is among the key companies reporting quarterly results before the opening bell.

On the economic front, ADP will release monthly US employment numbers at 8:15am ET.

The minutes from the Fed's December meeting will be published at 2:00pm ET.


4) Tuesday Market Recap

Over the past trading day, the Dow Jones industrial average lost 130 points, while the S&P 500 slid 0.9% and the Nasdaq fell 1.3%.

 

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Other top stories:

Countless Already Joined and Made a Profit - What About You?

The Importance of Diversification

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