The US PMI data published yesterday showed manufacturing remained in the contraction zone again in December (under 50), but slightly increased from 46.7 in November to 47.4 last month. It confirms that both a recession and an overheating of the economy can be avoided in the country.

The Fed released its minutes, which showed that central bankers are less optimistic than the market about the pace of rate cuts to come. Powell & Co are still suggesting that rates will come down, but that they will still remain higher than the market thinks, and for longer than the street imagines. It's nothing new, but it has dampened investor optimism. The probability of a first Fed rate cut at the March 19/20 meeting fell from 90.2% a week ago to 72.6% yesterday. This is substantial enough to explain the slight dip in indices.

UK stocks rose this morning, however, led by energy shares due to higher oil prices sparked by concerns over supply disruptions in the Red Sea. The FTSE 100 was up 0.2% at 0930 GMT.

Next jumped 5% after the retailer raised its profit guidance for the year ended January 2024 - the fifth time in eight months.

Shares of BP Plc rose 1.3% after it ended its agreement with Equinor to sell power to New York state.

Meanwhile, sportswear retailer JD Sports Fashion tumbled 21% after it lowered its full-year profit guidance due to higher costs and subdued demand.

There was some good news for Britain's economy, since the final S&P Global/CIPS UK Services Purchasing Managers' Index (PMI) which was published this morning, rose to 53.4 in December, up from 50.9 in November.

Things to read today: