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German retail sales slumped in December

Chris Scicluna
Emily Nicol
  • French inflation rose in January in line with expectations, but core pressures appear a touch softer; French GDP avoided a contraction in Q4 thanks to a big drop in imports,
  • A mixed bag from Japanese data, with IP a touch firmer than expected; retail sales rose in December and consumer confidence improved at the start of the year
  • US employment cost index for Q4 to be watched closely by the Fed

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Monetary policy decisions dominate the week ahead

Chris Scicluna
Emily Nicol
  • A big upside surprise to this morning’s Spanish inflation numbers – with the headline HICP rate up 0.3ppt to 5.8%Y/Y
  • The Fed’s latest monetary policy decision on Wednesday is likely to see another slowing in the pace of tightening to 25bps
  • The ECB is widely expected on Thursday to raise rates by a further 50bps; The BoE’s rate decision on Thursday looks more finely balanced, between a rate hike of 25bps or 50bps 

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Tokyo CPI inflation beat expectations

Chris Scicluna
Emily Nicol
  • French consumer confidence unexpectedly fell further
  • Spanish Q4 GDP growth slightly exceeded expectations
  • Following the Q4 GDP report, focus in the US today turns to the December personal income, spending and deflators

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BoJ’s JGB holdings surge

Chris Scicluna
Emily Nicol
  • The BoJ’s estimates of underlying price pressures suggested a further broadening at the end of last year
  • Germany’s GfK survey suggested consumers were more optimistic about the outlook 
  • French flash PMIs reported improvement in manufacturing but slight softening in services, but French INSEE survey reported a deterioration in wholesale trade and construction conditions
  • In the UK, public finance figures reported record borrowing in December

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BoJ’s first five-year special loan operation saw solid demand

Chris Scicluna
Emily Nicol
  • Hawkish commentary from ECB policymakers continued, with Dutch National Bank Governor Klaas Knot again signalling his desire for two ECB 50bps hikes this quarter
  • Flash PMIs the week's data highlights in the euro area and UK
  • First estimate of US Q4 GDP (Thursday) is expected to report respectable growth; December’s PCE deflators and spending figures also due (Friday)

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