Already this morning, UK CPI inflation for December has risen over expectations. The headline rate increased to 4% from 3.9%, but the core CPI remained at 5.1%. Sterling has had a firmer tone in early trading since the release.
Later today, the final Eurozone inflation report is expected to reveal that headline HICP increased to 2.9% and core HICP fell to 3.9% in December. In the United States, retail sales and industrial production for December are due.
Retail sales and industrial output statistics for December are among the several data releases for the United States today. We expect retail sales to gain 0.4% during the holiday season, while industrial production to rise only 0.2%.
Both will provide hints of Q4 GDP growth, which is expected next week. It is predicted that this will have decreased following the exceptional 4.9% annualised expansion in Q3, but so far, the signs are that Q4 growth will still be strong.
On the currency front, the major FX pairings remained in tight trading ranges.