*Trump's conciliatory address tempers risk-off bias
*European equities set for early gains on positive Asia
*BoE Carney due to speak but not expected to break wait-and-see mode
*Too early to call an end to Europe's manufacturing malaise
Anddddd we're back
US and Iran have both struck a conciliatory tone in the early hours of Asia, keeping price action settled after markets were sent into a tailspin following a retaliatory missile attack to the killing of General Qassem Soleimani. This comes as little surprise to traders with increased expectations prior to Trump's address that he would err on the side of caution; the President eventually exercising prudent restraint as the US Administration looks to navigate a tricky US-Iran minefield.
While major US equity benchmarks look upbeat, eager to clear the next obstacle in the journey towards all-time highs, there's no doubt the US-Iran complex remains fragile and unresolved. Geopolitical risk premiums associated with the events of the past few days have evidently softened but mustn't be discounted as traders look to remain highly reactive should US-Iran military rhetoric take a step in the wrong direction.
European markets point higher, scheduled risk ahead
Major European benchmarks are set to follow positive gains out of Asia with FTSE primed for a +30pt rally at the open, and DAX ready to climb 112pts as implied by the futures market.
GBPUSD avoided scares overnight to move below weekly lows of 1.308, as the conclusion of a meeting between UK PM Johnson and European Commissioner Ursual von der Leyen - while negative - failed to deliver anything new. Markets continue to fan sentiment that a comprehensive UK-EU free trade agreement within the tight end-of-year deadline remains extremely difficult.
On the central bank front, BoE Gov. Carney is due to deliver remarks at 9.30am GMT. While there's no imminent threat of a rate cut at the next meeting as forecast by market pricing, the BoE remain a massive unknown in the UK economic equation given its undecided state that hinges on how Brexit's next 12 months unfolds.
Industrial output and trade data for Germany also lie ahead and are worth the watch. Markets will be looking for some improvement as a means of strengthening the manufacturing rebound story in Europe. But there's still a fair bit of water to go under the bridge in terms of calling an end to Europe's manufacturing malaise.
ADP employment bodes well for NFPs
ADP National Employment figures have registered a decent beat coming in at 202k vs 160k consensus forecasts. This number, a precursor of sorts though still loose at times, keeps traders upbeat as we approach NFPs - the key data point for the week. The US growth story maintains strength and supports the US Dollar Index for now.