A look at the day ahead in European and global markets from Wayne Cole.

It's been another quiet session in Asia with many markets still on holiday. Japan was open and the BOJ's dogged defence of Yield Curve Control seems to be working with 10-year yields holding around 0.39% and away from the 0.5% ceiling.

Notably, the BOJ's new 1 trillion yen ($7.7 billion) offer of five-year funds on Monday drew bids for three times as much, suggesting this could prove a useful method of injecting added liquidity into the market. Essentially banks could borrow at an average 0.145% fixed for five years to invest in JGBs - what could go wrong?

With spreads widening against the yen, the USD has gained 1.7% in the past two sessions and stands around 130.30, while the AUD is up over 3% as an old favourite of the carry trade.

The euro hasn't been able to regain its $1.0927 top but did find support at $1.0850. Bulls are hoping the flash S&P global surveys on Tuesday will confirm the EU economy is currently faring better than the United States, in a reversal of fortunes.

The EU manufacturing PMI is seen edging up to 48.5 in early January from 47.8, and services to 50.2 from 49.8, reflecting in part sharply lower gas prices and the relatively warm winter so far.

JPMorgan (NYSE:) is forecasting NWE gas storage will be 56% full at the end of winter, nearly 30%-points higher than the five-year average and a drag on prices.

The U.S. manufacturing PMI is forecast to dip to 46.0 from 46.2, with services at 45.0 from 44.7. Ironically, the weather in the States in recent weeks has been a lot worse than in Europe, which was not how this story was supposed to pan out.

Elsewhere, U.S. stock futures have been becalmed in Asia after rallying overnight. Nasdaq futures gained 2% led by semiconductor and other tech stocks, with some suggesting the recent run of job layoffs in the sector represents a new focus on cutting costs and lifting profits.

Microsoft (NASDAQ:) reports after the bell with the focus on how its cloud and enterprise units are doing, though its reported $10 billion investment in OpenAI is likely to get more column inches in the media. Others reporting include Johnson & Johnson (NYSE:), Verizon (NYSE:) and Texas Instruments (NASDAQ:).

Key developments that could influence markets on Tuesday:

- ECB head Lagarde speaks, but a video message at a roundtable on "The euro as a guarantee of resilience" doesn't sound exactly market moving.

($1 = 130.2100 yen)