Yesterday we featured this EUR/GBP swing low support level:

'With daily support having held, if this intraday zone holds, I'm happy to look for longs on any retests back into or around it.'

As you can see, we were looking for the level to hold, from where we would take an entry off an intraday retest.

Well look at this:

EUR/GBP 15 Minute:

'Find good levels and you can't go wrong!'

The Japanese yen is almost unchanged in the Monday session. Currently, USD/JPY is trading at 113.40. On the release front, Japanese Revised Industrial Production dropped to 0.7%, but still beat the forecast of 0.5%. In the US, we'll get a look at PPI and Janet Yellen testifies before Congress on the semi-annual Monetary Policy Report. If Yellen reiterates that the Fed plans several rate hikes this year, the US dollar could make gains. On Wednesday, the US releases retail sales and CPI reports, and Yellen will continue her testimony before the US Senate.

President Shinzo Abe met with President Trump last week, and Abe waxed positive about his summit with Trump. Abe said the two leaders had agreed to have their finance leaders discuss currency issues that have caused tensions between the US and Japan. Trump recently charged that Japan was manipulating its currency to gain a trade advantage. The Japanese government has countered that its ultra-accommodative monetary policy was aimed at curbing deflation. Still, Abe and BoJ Governor Haruhiko Kuroda will have to keep a close eye on the yen – if the dollar pushes past 120 yen, Trump could express his displeasure with the exchange rate in order to protect US exporters.

President Donald Trump has promised to cut taxes and spend big on infrastructure structures, but he has not released any details in this regard, much to the consternation of the markets. Last week, Trump said that the administration was working on a "phenomenal" tax plan, which would be released in a few weeks, although he gave no details. Trump's plan is expected to lower taxes for both corporations and individuals, although tax reform promises to be a slow and daunting task. The markets are looking for some details regarding Trump's plans for the US economy, and if Trump's plan to reform the US tax code seems feasible, the markets could rally and push the US dollar to higher levels.

USD/CAD has edged upwards in the Tuesday session. Currently, the pair is trading at 1.3030. On the release front, there are no Canadian events on the schedule. In the US, we'll get a look at PPI and Janet Yellen testifies before Congress on the semi-annual Monetary Policy Report. If Yellen reiterates that the Fed plans several rate hikes this year, the US dollar could make gains. On Wednesday, the US releases retail sales and CPI reports, and Yellen will continue her testimony before the US Senate.

Canadian Prime Minister Justin Trudeau jetted back to Ottawa after meeting President Trump in Washington on Monday. It was "mission accomplished" for the Canadian leader, who was looking for reassurances from Trump that he would not tear up NAFTA, the trade agreement which is the bedrock of the trade relationship between the two countries. After the leaders met, Trump said his biggest concern with NAFTA was with Mexico rather than its northern neighbor. Trump stated that the US has a "very outstanding trade relationship with Canada. We'll be tweaking it." Although Trudeau could do without the tweaking, Trump's comments come as an enormous relief. Given that 80 percent of Canadian exports go to the US, any significant protectionist measures from the US could have drastic negative implications for the Canadian economy.

Will Donald Trump break radio silence and provide details about his economic stance? Trump has promised to cut taxes and spend big on infrastructure structures, but he has not released any details in this regard, much to the consternation of the markets. Last week, Trump said that the administration was working on a "phenomenal" tax plan, which would be released in a few weeks, although he gave no details. Trump's plan is expected to lower taxes for both corporations and individuals, although tax reform promises to be a slow and daunting task. The markets are looking for some details regarding Trump's plans for the US economy, and if Trump's plan to reform the US tax code seems feasible, the markets could rally and push the US dollar to higher levels.

Daily Pivots: (S1) 1.0572; (P) 1.0615 (R1) 1.0639; More.....

With 1.0713 minor resistance intact, intraday bias in EUR/USD stays mildly on the downside. Corrective rise from 1.0339 should have completed at 1.0828 already. Decline from there should target a test on 1.0339 low first. Decisive break there will confirm resumption of medium term down trend. On the upside, however, above 1.0713 minor resistance will delay the bearish case and turn bias neutral first.

In the bigger picture, whole down trend from 1.6039 (2008 high) is in progress. Such down trend is expected to extend to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. On the upside, break of 1.1298 resistance is needed to confirm medium term bottoming. Otherwise, outlook will stay bearish in case of rebound.

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Daily Pivots: (S1) 1.0026; (P) 1.0048; (R1) 1.0077; More.....

With 0.9985 minor support intact, intraday bias in USD/CHF stays cautiously on the upside. Sustained trading above 55 day EMA (now at 1.0038) will pave the way for a test on 1.0342 high. On the downside, below 0.9985 minor support will turn focus back to 0.9860 short term bottom instead.

In the bigger picture, prior rejection from 1.0327 resistance argues that USD/CHF is staying in a medium term sideway pattern. In any case, decisive break of 1.0342 resistance is needed to confirm underlying strength. Otherwise, we'll stay neutral in the pair first. In case of another fall, we'd expect strong support from 0.9443/9548 support zone. Meanwhile firm break of 1.0342 will target 38.2% retracement of 1.8305 to 0.7065 at 1.1359.

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Daily Pivots: (S1) 113.37; (P) 113.77; (R1) 114.13; More...

A temporary top is in place at 114.16 with 4 hour MACD crossed below signal line. Intraday bias in USD/JPY is turned neutral first. We're still favoring the case that correction from 118.65 has completed at 111.58. Above 114.16 will target 115.37 resistance first. Break will confirm this bullish case and bring retest of 118.65 high. Meanwhile, below 112.85 minor support will dampen this bullish view and could extend the correction from 118.65. In that case, downside should be contained by 38.2% retracement of 98.97 to 118.65 at 111.13 and bring rebound.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. The impulsive structure of the rise from 98.97 suggests that the correction is completed and larger up trend is resuming. Decisive break of 125.85 will confirm and target 61.8% projection of 75.56 to 125.85 from 98.97 at 130.04 and then 135.20 long term resistance. Rejection from 125.85 and below will extend the consolidation with another falling leg before up trend resumption.

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Daily Pivots: (S1) 1.2483; (P) 1.2511; (R1) 1.2551; More...

GBP/USD dips today but stays in middle of range of 1.2346/2705. Intraday bias remains neutral at this point. Price actions from 1.1946 are viewed as a consolidation pattern, with rise from 1.1986 as the third leg. In case of another rise, we'd expect upside to be limited by 1.2774 to bring larger down trend resumption. On the downside, below 1.2346 will revive the case that such consolidation is completed at 1.2705 already. In that case, intraday bias will turn back to the downside for retesting 1.1946 low.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term bottoming yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.

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Dollar trades generally softer, in particular against commodity currencies today. Some attribute Dollar's weakness to news of resignation of US president Donald Trump's national security advisor Michael Flynn. The developments since Trump came to office raised some doubts on whether his administration is able to push through his expansive policies. But for the time being, Fed chair Janet Yellen's testimony to the Senate is the main focus. Markets will look for hints of the chance of a March hike. Also, Yellen's speech will be scrutinized for her view on Fed's projection of three hike this year. But overall, Yellen would likely sound noncommittal. And the real test for Dollar would be on the economic projections to be released in Fed's March meeting. Released from US, PPI rose 0.6% mom, 1.6% yoy in January. PPI core rose 0.4% mom, 1.2% yoy. Both are above market expectations.

Sterling Plummets on CPI Miss

Sterling tumbles broadly today and pared back much this week's gain. Weaker than expected inflation reading add to the case for BoE to stand pat at least through 2017. UK CPI dropped -0.5% mom in January and rose 1.8% yoy. The annual rate was faster than December's 1.6% yoy but missed expectation of 1.9% yoy. Core CPI was unchanged at 1.6% yoy, missing expectation of 1.7% yoy. RPI dropped -0.6% mom, rose 2.6% yoy. PPI input rose 1.7% mom, 20.5% yoy. PPI output rose 0.6% mom, 3.5% yoy. PPI output core rose 0.5% mom, 2.4% yoy. House price index rose 7.2% yoy in December.

German ZEW economic sentiment tumbled

German ZEW economic sentiment dropped sharply to 10.4 in February, down from 16.6, and missed expectation of 15.1. German ZEW current situation dropped to 76.4, down from 77.3, below expectation of 77.0. Eurozone ZEW economist sentiment also dropped sharply to 17.1, down from 23.2, below expectation of 22.3. ZEW president Achim Wambach noted that "political uncertainty regarding Brexit, the future U.S. economic policy as well as the considerable number of upcoming elections in Europe further depresses expectations." Nonetheless, he talked down the significant of the deterioration. Wambach also said that "the economic environment in Germany has not significantly worsened."

Other economic data released from Eurozone are generally disappointing too. Eurozone GDP grew 0.4% qoq in Q4, below expectation of 0.5% qoq, slowed from prior quarter's 0.2% qoq. German GDP growth accelerated to 0.4% qoq, up from Q3's 0.2% qoq, but missed expectation of 0.5% qoq. Italian GDP growth slowed to 0.2% qoq, down from Q3's 0.3% qoq, below expectation of 0.3% qoq. Meanwhile, Eurozone industrial production dropped -1.6% mom in December. German CPI was finalized at -0.6% mom, 1.9% yoy.

From Swiss, CPI rose 0.0% mom, 0.3% yoy in January. PPI rose 0.4% mom, 0.8% yoy.

China inflation accelerated

On the dataflow, headline CPI in China accelerated to 2.5% yoy in January, beating expectations of 2.1% and December's 2.1%. Core inflation, excluding food and energy, improved to 2.2% yoy, up from 1.9% in December. Food inflation rose to 2.7% yoy from 2.4% previously, while nonfood inflation rose to 2.5% yoy from 2% previously. PPI jumped to 6.9% yoy, compared with consensus of 6.6% and December's 5.5%.Improvement in China's inflation might prompt the government to consider monetary tightening. Staying in Asia Pacific, the final estimate of Japan's industrial production expanded 0.7% mom in December, compared with consensus of, and November's, 0.5% gain. Also from Asian pacific, Australia NAB business confidence rose to 10 in January.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.2483; (P) 1.2511; (R1) 1.2551; More...

GBP/USD dips today but stays in middle of range of 1.2346/2705. Intraday bias remains neutral at this point. Price actions from 1.1946 are viewed as a consolidation pattern, with rise from 1.1986 as the third leg. In case of another rise, we'd expect upside to be limited by 1.2774 to bring larger down trend resumption. On the downside, below 1.2346 will revive the case that such consolidation is completed at 1.2705 already. In that case, intraday bias will turn back to the downside for retesting 1.1946 low.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term bottoming yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.

Economic Indicators Update

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Tuesday February 14: Five things the markets are talking about

Risk-off is back in vogue as the dismay in the Trump administration is overshadowing optimism for an improving U.S. economy.

Trump's promises that tax cut and infrastructure spending plans are coming, some good-tempered meetings with world leaders (Japan's PM Abe and Canada's Trudeau), as well as expectations of a more "dovish" Federal Reserve had temporarily rekindled investors' appetite for risk. However, this has come to an abrupt end in the overnight session.

After lengthy DoJ investigations, Trump's NSA advisor Michael Flynn has submitted his resignation after admitting he gave "incomplete" information regarding phone calls with Russia about U.S sanctions - stocks have retreated, the dollar is under pressure, gold is better bid and U.S yields a tad lower.

Investors will now turn their attention to Fed Chair Yellen's testimony in Congress today for market guidance (10:00am EST).

Her testimony will be watched for hints on rates, deregulation and global concerns - fixed income dealers are pricing in a +30% chance the Fed will lifts rates at its March 15 meeting.

1. Global stock indices see "Red"

In Japan, stocks fell as investor sentiment soured after Toshiba Corp delayed its earnings release, including details of a multibillion dollar charge related to cost overruns at its U.S. nuclear arm.

With Toshiba's stock nose-diving -8% helped drag the Nikkei down -1.1%.

In Hong Kong, stocks ended little changed as growing profit taking after a two-month rally offset sustained inflows from main land Chinese investors.

Note: The Hang Seng has risen about +8% ytd, riding a wave of optimism that global economic growth is improving.

In China, the Shanghai Composite Index was largely unchanged after data showed the country's inflation (see below) picked up to multi-year highs and reinforced a shift by Beijing to a more tighter policy stance.

In Europe, the Stoxx Europe 600 Index has slipped -0.1% in early trade, after a five-day rally that brought it to the highest level in more than a year. The FTSE 100 Index has lost -0.3%.

U.S stocks are set to open in the red (-0.1%).

Indices: Stoxx50 -0.1% at 3306, FTSE +0.1% at 7286, DAX -0.1% at 11768, CAC-40 flat at 4889, IBEX-35 +0.1% at 9494, FTSE MIB +0.3% at 19111, SMI -0.3% at 8442, S&P 500 Futures -0.1%

2. Oil prices range bound, gold supported

Crude oil has strengthened slightly overnight, supported by the OPEC-led effort to cut output while rising U.S production is keeping prices within the narrow ranges that have contained them so far this year.

Brent crude is up +45c at +$56.04 a barrel, while U.S. light crude oil (WTI) is up +35c at +$53.28.

Note: The two benchmarks fell -2% yesterday and both remain in the middle of a $5-per-barrel trading ranges seen since early December.

Capping global prices are U.S. oil drillers - they have added the most drilling rigs since 2012 over the past month, bringing the total count to 591.

Gold prices have edged higher (+0.3% to $1,228.90 per ounce) ahead of the U.S open as the dollar underperforms. Investors are turning their attention to the Fed's Janet Yellen testimony in Congress for clues on U.S interest rates.

The techs see support at +$1,215 and strong resistance on top at +$1,240.

3. U.S curve will take shape after Humphrey-Hawkins

Fed Chair Yellen takes the stand for two days in Washington for her Humphrey-Hawkins testimony beginning at 10:00 a.m. EST (today, senate committee).

Note: She will deliver her monetary policy report and prepared remarks and will also present the same report and remarks to the House Financial Services Committee at 10 a.m. tomorrow.

Expect fixed income dealers to get a better handle of the U.S curve once Yellen is questioned on the economy, the path of interest rates, the labor market, financial regulation and the potential impact of the Trump administration's economic policies.

Investors started the week embracing risk, which has backed up Treasury yields +4bps to +2.45%, steepening the curve - a change from the past couple of weeks.

4. Pound pummeled on inflation miss

Ahead of the U.S open, sterling has fallen to an intraday low against the dollar (£1.2452) and the EUR (€0.8524) after data showed that U.K. CPI rose by +1.8% on the year in January.

It was the fastest rate in nearly three-years, but slightly below the consensus (+1.9%). Inflation is being caused mainly by the fall in the pound since the Brexit referendum vote, and there are concerns higher prices will dampen consumer spending and certainly should discourage the BoE from raising interest rates any time soon.

Elsewhere, the USD is keeping within recent ranges, as traders seem to be positioning themselves for potential "dovish" language from the Fed's Yellen.

The EUR is back above the psychological €1.06 level, while the yen (¥113.27) has added +0.4%, after falling -0.5% yesterday.

5. China inflation data continues to improve

Overnight, China released its January CPI and PPI numbers, both topped expectations. The CPI hit a 32-month high (2.5% vs. 2.4%e), while the PPI registered its fifth consecutive increase and highest print since Aug 2011 (6.9% vs. 6.5%e).

Note: The CPI increase was more heavily skewed to food inflation (2.7% vs. 2.4% prior) as non-food component slowed to 0.7% vs. 2.0% prior. China Stats Bureau noted the CPI was skewed by the Lunar New Year effect, since it came in January this year as opposed to February of last year.

Other data released showed that China January new yuan loans missed expectations, but still recorded its second highest reading on record (+¥2.03T vs. +¥2.44Te).

Note: The U.S Commerce Secretary may not choose to name China as a currency manipulator, but rather designate the practice of "currency manipulation as an unfair subsidy when employed by any state."

German GDP registers a slight miss but start of 2017 touted as a solid in a key election year

EU Mid-Market Update: Slight miss in UK CPI sends GBP currency lower; German GDP registers a slight miss but start of 2017 touted as a solid in a key election year

Notes/Observations

Focus on Fed's Yellen with her appearance before the Senate Banking Committee; Should she divert from the moderate projection of the interest rate path as currently priced into the market, the USD may rally

Germany Q4 GDP registers a slight miss but itd domestic economy enters 2017 (a key election year) on solid footing and provides cushion in light of uncertain future trade relations with the UK and the US

UK Jan CPI data comes in below expectations but still registers its highest annual pace since Jun 2014 (Y/Y: 1.8% v 1.9%e)

China Jan New Yuan Loans miss expectations but still its 2nd highest reading on record (CNY): 2.03T v 2.44Te

Overnight:

Asia:

China inflation data continues to improve. Jan CPI hits 32-month high (2.5% v 2.4%e); PPI registered its 5th straight increase and highest since Aug 2011 (6.9% v 6.5%e); with rising commodity prices and a strong January base effect providing the main catalysts

Europe:

Greece Fin Min Tsakalotos stated that it aimed to get political agreement on all issues around the Greek bailout review talks by the Feb 20th Eurogroup meeting - IMF's Lagarde: IMF was doing best it could on Greece bailout, but could not cut a special deal for any country

German CSU Parliamentary Floor Leader Friedrich said to have told Greece Conservative Leader that Greece would not receive any further financial support if it fails to fully implement economic reform obligations

Americas:

US National Security Advisor Michael Flynn resigns after he is alleged to have discussed US sanctions with Russian Ambassador before Trump was elected; Lt Gen Joseph Kellogg as acting National Security Advisor

Fed's Kaplan (Dallas, moderate, voter): Fed could raise rates in a gradual and patient manner; should act soon to raise rates, or risk having to abandon its plan to do so slowly

Economic data

(IN) India Jan Wholesale Prices (beat) Y/Y: 5.3% v 4.3%e (31-month high)

(DE) Germany Q4 Preliminary GDP (miss) Q/Q: 0.4% v 0.5%e; Y/Y: 1.7% v 1.8%e; GDP NSA Y/Y: 1.2% v 1.4%e

(DE) Germany Jan Final CPI M/M: -0.6% v -0.6%e; Y/Y: 1.9% v 1.9%e; highest annual pace in 3 1/2 years

(HU) Hungary Q4 Preliminary GDP (miss) Q/Q: 0.4% v 0.7%e; Y/Y: 1.6% v 2.0%e

(HU) Hungary Jan CPI M/M: 0.4% v 0.3%e; Y /Y: 2.3% v 2.2%e

(CZ) Czech Q4 Advance GDP (miss) Q/Q: 0.2% v 0.7%e; Y/Y: 1.7% v 2.3%e

(CH) Swiss Jan CPI M/M (beat): 0.0% v -0.1%e; Y/Y: 0.3% v 0.3%e

(CH) Swiss Jan CPI EU Harmonized M/M: -0.2% v -0.1% prior; Y/Y: +0.3%e v -0.2% prior

(CH) Swiss Jan Producer & Import Prices (beat) M/M: 0.4% v 0.2%e; Y/Y: 0.8% v 0.5%e

(NL) Netherlands Q4 Preliminary GDP (miss) Q/Q: 0.5% v 0.6%e; Y/Y: 2.3% v 2.8%e

(ZA) South Africa Q4 Unemployment Rate: 26.5% v 27.0%e

(IT) Italy Q4 Preliminary GDP Q/Q: 0.2% v 0.3%e; Y/Y: 1.1% v 1.0%e

(PL) Poland Q4 Preliminary GDP Q/Q: 1.7% v 1.2%e; Y/Y: 2.7% v 2.5%e

(CN) China Jan M2 Money Supply Y/Y: 11.3% v 11.3%e, M1 Money Supply Y/Y: % v 20.2%e, M0 Money Supply Y/Y: % v 8.9%e

(CN) China Jan New Yuan Loans (CNY): 2.03T v 2.44Te (2nd highest on record)

(CN) China Jan Aggregate Financing (CNY): 3.74T v 3.00Te

(UK) Jan CPI M/M: -0.5% v -0.5%e; Y/Y: 1.8% v 1.9%e; CPI Core Y/Y: 1.6% v 1.7%e (highest annual pace since Jun 2014)

(UK) Jan RPI M/M: -0.6% v -0.4%e; Y/Y: 2.6% v 2.8%e; RPIX Y/Y: 2.9% v 3.1%e

(UK) Jan PPI Input M/M: 1.7% v 1.0%e; Y/Y: 20.5% v 18.5%e

(UK) Jan PPI Output M/M: 0.6% v 0.3%e; Y/Y: 3.5% v 3.2%e

(UK) Jan PPI Output Core M/M: 0.5% v 0.3%e; Y/Y: 2.4% v 2.2%e

(PT) Portugal Q4 Preliminary GDP (beat) Q/Q: 0.6% v 0.3%e; Y/Y: 1.9% v 1.6%e

(GR) Greece Q4 Advance GDP (miss) Q/Q: -0.4% v +0.4%e; Y/Y: 0.3% v 2.2% prior

(DE) Germany Feb ZEW Current Situation Survey: 76.4 v 77.0e; Expectations Survey: 10.4 v 15.0e

(EU) Euro Zone Feb ZEW Survey Expectations: 17.1 v 23.2 prior

(EU) Euro Zone Q4 Preliminary GDP (miss) Q/Q: 0.4% v 0.5%e; Y/Y: 1.7% v 1.8%e (2nd reading)

Fixed Income Issuance:

(ES) Spain Debt Agency (Tesoro) sold total €5.01B v €4.5-5.5B indicated range in 6-month and 12-month Bills

(ZA) South Africa sold total ZAR2.35B vs. ZAR2.35B indicated in 2026, 2035 and 2040 bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx50 -0.1% at 3306, FTSE +0.1% at 7286, DAX -0.1% at 11768, CAC-40 flat at 4889, IBEX-35 +0.1% at 9494, FTSE MIB +0.3% at 19111, SMI -0.3% at 8442, S&P 500 Futures -0.1%]

Equities

Consumer discretionary [Aryzta [ARYN.CJ] +11% (CEO and CFO to step down)]

Industrials: [Michelin ML.FR +2% (Earnings), Rolls Royce RR.UK -4.1% (earnings)]

Financials: [Randstad RAND.NL +3.7% (Earnings), Credit Suisse CSGN.CH +3% (Earnings), HeidelburgCement HEI.DE -1.7% (Earnings)]

Energy: [EDF EDF.FR -0.5% (Earnings)]

Speakers

Germany Econ Min Gabriel: Economy off to a solid start for 2017 with Business climate being good while employment was growing

ZEW Economists noted that political uncertainty on Brexit and US economic policy and European elections were depressing expectations

Turkey PM Yildirim reiterated view that FX volatility is temporary with its impact seen limited

White House said to be exploring a new tactic to discourage China from undervaluing its currency to boost exports. Under the plan, the commerce secretary would designate the practice of currency manipulation as an unfair subsidy when employed by any country, instead of singling out China

UN Nuclear Agency (IAEA): Iran missile test was unrelated to nuclear agreement commitments

Currencies

The USD was keeping within recent ranges and a touch softer heading into the NY morning. Traders were positioning for potential dovish language from US Fed chair Janet Yellen. Dealers noted that the Fed chief would have to present the Fed's view which at times has differed from her more dovish attitude. The greenback was also weighing the resignation of National Security Advisor Michael Flynn.

EUR/USD was back above the 1.06 level after a quick flush below the handle to gun for stops loitering below the 50-day moving average

A slight miss in UK CPI sent the GBP currency softer. GBP/USD moved from 1.2510 to test below 1.2450 as the inflation remained below the BOE 2.0% target for the 35th straight month. The 10-year Gilt yield dipped lower as well to test 1.29%

Fixed Income:

Bund futures trade at 163.82 up 6 ticks retracing from highs after futures failed to hold above 164. A move back higher targets 164.17 followed by 164.46, 164.94. Support remains at 163.44 followed by 162.92.

Gilt futures trade at 125.35 down 2 ticks retracing off lows on slightly weaker then expected UK inflation data however did mark the highest annual reading since June 2014. Resistance moves to 125.90 then 126.28 followed by 126.70. A move back below 125.20 low targets 124.91 followed by 124.46. Short Sterling futures trade flat with Jun17Jun18 trading 19bp choice.

Tuesday's liquidity report showed Monday's excess liquidity falls to €1.3215T down €15B from €1.330T prior. Use of the marginal lending facility falls to €353M from €590M prior.

Corporate issuance saw $6.7B come to market via 5 issuers headlined by American Honda finance $1.75B 3 part offering and Goldman Sachs $3B 3 part offering. This puts Monthly issuace at $31.6B.

Looking Ahead

(PT) Bank of Portugal reports Dec ECB financing to Portuguese Banks: €B v €22.4B prior

(AR) Argentina Central Bank: 7-Day Repo Reference Rate

05:30 (UK) Weekly John Lewis LFL sales data

05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender

05:30 (HU) Hungary Debt Agency (AKK) to sell 3-month Bills

06:00 (US) Jan NFIB Small Business Optimism: 104.9e v 105.8 prior

06:00 (PT) Portugal Q4 Labour Costs Y/Y: No est v 3.6% prior

06:00 (BR) Brazil Dec Retail Sales M/M: -2.0%e v +2.0% prior; Y/Y: -4.6%e v -3.5% prior

06:00 (BR) Brazil Dec Broad Retail Sales M/M: -0.4%e v +0.6% prior; Y/Y: -6.6%e v -4.5% prior

06:00 (TR) Turkey to sell 10.6% 2026 Bonds

06:45 (US) Daily Libor Fixing

07:00 (IS) Iceland Jan Unemployment Rate: No est v 2.3% prior

07:45 (US) Weekly Goldman Economist Chain Store Sales

08:00 (RO) Romania Central Bank (NBR) Feb Minutes

08:00 (PL) Poland Jan M3 Money Supply M/M: -0.6%e v 2.1% prior; Y/Y: 9.2%e v 9.6% prior

08:00 (RU) Russia announces weekly OFZ bond auction

08:15 (UK) Baltic Dry Index

08:30 (US) Jan PPI Final Demand M/M: 0.3%e v 0.3% prior; Y/Y: 1.5%e v 1.6% prior

08:30 (US) Jan PPI Ex Food and Energy M/M: 0.2%e v 0.2% prior; Y/Y: 1.1%e v 1.6% prior

08:30 (US) Jan PPI Ex Food, Energy, Trade M/M: 0.1%e v 0.1% prior; Y/Y: No est v 1.7% prior

08:30 (CA) Canada Jan Teranet/National Bank HPI M/M: No est v 0.3% prior; Y/Y: No est v 12.3% prior

08:50 (US) Fed's Lacker to speak at University of Delaware

08:55 (US) Weekly Redbook Sales

09:00 (EU) Weekly ECB Forex Reserves: € v €280.3B prior

09:50 (UK) Bank of England (BOE) Bond Buying Operation (over 15 years)

10:00 (US) Fed Chair Yellen semi-annual testimony before Senate Banking Panel

11:00 (IS) Iceland Jan International Reserves (ISK): No est v 815B prior

11:00 (UR) Ukraine to sell Bonds - 11:30 (US) Treasury to sell 4-Week Bills

13:15 (US) Fed's Lockhart to speak on Economy in Huntsville, Alabama

16:00 (CL) Chile Central Bank (BCCH) Interest Rate Decision: Expected to leave Overnight Rate Target unchanged at 3.25%

16:30 (US) Weekly API Oil Inventories