The U.S. dollar recovered from the losses from Wednesday led by slightly better inflation report and budget deficit narrowed to $13.5 billion year on year from $23.2 billion.
On the economic front, data from the UK showed inflation fell more than expected to 1.8%. Economists polled were expecting a decline to 1.9%. The core inflation rate increased steadily to 1.9%.
In the Eurozone, industrial production decreased more than expected to 0.9%. Economists forecast a decline to 0.4% on the month.
Sweden’s Riksbank held its monetary policy meeting yesterday. The repo rate kept at -0.25% as expected. The central bank signaled that it would hike rates once more during the second half of the year which would bring the repo rate to zero percent.
In the United States, consumer prices stayed flat during January. The core inflation rate rose by 0.2% which was within expectations. However, yearly, headline inflation rose to 1.6%, which scored better than expected, while core inflation kept stable at 2.2%.
The markets opened to the quarterly GDP data from Japan. Data showed that Japan’s GDP in the fourth quarter of 2018 advanced 0.3% This was slightly slower than the median expectations of a 0.4% increase. Still, the fourth quarter GDP was better compared to the third quarter’s contraction of 0.6%.
China released the monthly trade balance figures which advanced to 39.2 billion against expectations of a decline to $33.5 billion.
The European trading session will start with the GDP figures for Germany for the fourth quarter. Data should show that Germany’s GDP advanced 0.1% on the quarter ending December 2018. This follows a 0.2% decline in the second quarter marking a contraction in the economy.
The flash GDP figures for the Eurozone are next and no changes are expected as the Eurozone’s economy is expected to be confirmed at 0.2% growth rate for the fourth quarter of 2018.
The NY trading session will see the manufacturing sales report from Canada followed by the retail sales report from the United States.
U.S. retail sales should see a 0.1% increase this month, slightly lower than the 0.2% increase from the month before. Core retail sales are expected to remain flat during the month after increasing 0.2% previously.
Producer prices index data is also on the tap today. Headline PPI should rise by 0.1% on the month while core PPI is expected to grow by 0.2% following a 0.1% decline in December.