Uncertainty is back to dominate the political arena in Europe more renewed tension in Spain and Italy. Markets will start the day with a somewaht fresh economic agenda featuring the services PMI data from the eurozone, while companies continue to report fourth-quarter earnings.
Markit Economic is set to release a new round of purchasing managers` indexes, with Spain`s final services PMI expected to be revised down slightly to 44.2 from 44.3. For Italy, services PMI is expected to be revised to 45.8 from 45.6, and steady at 55.3 for Germany.
In the euro area the services PMI is expected to show the activity across manufacturing and services contracted at the weakest rate in ten months, with the composite PMI unchanged at 48.2, up from December`s 47.2. In the UK, the services PMI may linger at 48.9.
It seems that European economies are catching a breath again after a year of multi-month contraction, where manufacturing and service downturns is seen bottoming out, as services activity was driven by renewed expansion in Europe`s largest economy, Germany.
Looking ahead, companies continue to offer some pretty good earnings for the fourth quarter of 2012, however oil giant BP is expected to post a decline in earnings amid surging charges amid the cleaning-up progress in the wake of the oil spill in the Mexican Gulf.
More on the earnings avenue, Switzerland`s largest bank, UBS is due to post its quarterly profits and revenues, expected to decline as well against the backdrop of sanctions imposed by U.S. regulators on the lender before it has confirmed it is halting all operations in Iran.
Market sentiment is mixed again with growing political uncertainty in Spain and Italy, driving traders to book profits that led single currency to its strongest monthly performance against the dollar in fourteen last week. Meanwhile, the euro is down from $1.3513 to $1.3484.
Risk assets is apparently could lose more steam, as Spanish Prime Minister Mariano Rajoy was stormed by calls to depart his post over a corruption scandal, while Italy witnesses another wave of growing popularity for former PM Silvio Berlusconi before elections.
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