Market sentiment in Europe was modestly lower on Wednesday, with major bourses trading in a narrow range. However, US equity futures were firmer, with investors optimistic about the upcoming earnings season and economic data. The US dollar, meanwhile, attempted to make up for recent losses as it faced pressure from soft German Ifo metrics.

In fixed income markets, benchmarks were generally firmer, with Bunds catching a bid on softer-than-expected German Ifo figures. Crude oil prices briefly spiked on reports of Israel’s army taking “another step” in the plan to occupy Gaza city. However, the rally was short-lived as investors took profits amid concerns over geopolitical tensions in the region.

Looking ahead, investors will keep a close eye on supply from the US and speeches from key central bankers, including Bank of England’s Greene and Federal Reserve’s Daly. The latter is expected to provide insights into the US economy and monetary policy outlook, which could impact global markets.

In other news, gold prices took a breather after recent upside, as investors remained cautious about the economic recovery and inflation outlook. However, the precious metal remains well-supported by central bank actions and geopolitical tensions.

Overall, market sentiment remains mixed, with investors navigating a complex landscape of economic data, central bank actions, and geopolitical risks. As always, it’s important to stay informed and up-to-date on the latest developments to make informed investment decisions.