Market movers ahead
- US retail sales will be important to gauge the strength of the US economy currently. We will also keep an eye on US CPI inflation and durable goods orders.
- On Brexit, three important votes are coming up.
- US-China trade talks are entering the final stage, which is also going to be the most difficult one, as challenges remain. The longer it takes to announce a summit between Donald Trump and Xi Jinping, the more markets will start to worry.
- In the euro area, focus is set to be on industrial production data, which fell sharply in December. Car sales should provide insight into how much of a rebound we can expect from the slump in 2018.
- The Bank of Japan is set to keep its policy stance unchanged at its meeting on Friday.
- In Scandinavia, focus turns to Swedish inflation numbers and Norway’s regional network survey.
Weekly wrap-up
- The ECB joined the Fed in taking a surprisingly dovish twist in its policy guidance and surprised the markets and ourselves by announcing a new series of liquidity measures (TLTRO3s). We no longer expect an ECB hike within our 12-month forecast horizon.
- EUR/USD and bond yields moved sharply lower on the surprise move by the ECB. Lower risk appetite added to the downward move in yields.
