UK INFLATION DATA HEADLINE TUESDAY SCHEDULE
Investors can expect a steady pick-up in economic data on Tuesday following a slow start to the week, with reports on UK inflation set to dominate the headlines.
Action Begins at 07:45 GMT with France’s quarterly nonfarm payrolls report. The data are expected to show a 0.2% increase in nonfarm jobs in October-December, following a 0.3% increase the previous quarter.
Switzerland will release headline producer inflation figures at 08:15 GMT. The producer price index (PPI) for January is forecast to climb 0.3% month-on-month, which translates into an annualized rate of 0.9%.
The UK Office for National Statistics will release a deluge of inflation data at 09:30 GMT, including the retail price index, producer price index and consumer price index. Consumer inflation in the UK is forecast to fall 0.6% in January, following a 0.4% increase the month before. In annualized terms, CPI is forecast to dip to 2.9% from 3%.
Core inflation, which strips away volatile goods such as food and energy, is projected to rise 2.6% year-over-year, up from 2.5%.
The Bank of England (BOE) risked over-inflated the economy when it decided to slash interest rates in the wake of the June 2016 Brexit vote. Central bankers voted to raise interest rates in November for the first time in more than a decade.
Shifting gears to North America, the National Federation of Independent Business (NFIB) will release its monthly US business optimism index at 11:00 GMT. The monthly report is not considered a major mover of financial markets but is used to gauge short-term trends in the active small business sector.
The American Petroleum Institute (API) will release its weekly crude inventory report at 21:30 GMT, which is a precursor to the official data provided by the US Energy Information Administration (EIA) the following morning.
In terms of monetary policy, Federal Open Market Committee (FOMC) member Loretta Mester will deliver a speech at 13:00 GMT.
Europe’s common currency bounced back on Monday, as the dollar drifted lower against a basket of world currencies. The EUR/USD briefly traded above 1.2300 but was last seen trading at 1.2286. The pair remains rangebound, with the 1.2200 handle providing the bottom.
Pound sterling was confined to a narrow range on Monday, as investors turned their attention to UK inflation data. Cable was last seen trading at 1.3837, with the bulls eyeing a re-test of the psychological 1.4000 level.
Crude prices are fresh off their worst week in two years, as prices crashed more than 10% in the wake of fresh inventory data and signs of surging US shale output. Markets flatlined at the start of the week but have since rallied amid renewed dollar weakness. US oil prices were last seen trading around $59.68 a barrel for a gain of 0.7%.