Market movers today
Focus will be on US data. We expect headline CPI inflation to have eased markedly in December to 0.8% y/y from 1.3% y/y on the back of mainly the lower oil price. Importantly, we expect core CPI excluding food & energy to have stayed unchanged at 1.7% y/y but we could see a slight downward trend in core CPI in the coming month. We expect Fed to ignore the decline in headline inflation as long as the labour market continues to improve and core inflation and inflation expectations do not start to slide substantially.
Today's preliminary University of Michigan consumer confidence for January will also be important in light of the disappointing retail sales report for December. Consumer sentiment improved markedly in the past three months and is currently at its highest level since January 2007. If this positive trend is confirmed, it might again increase the market's confidence in the strength of the US consumer. US industrial production for December will also be released.
ECB's governing council member Carlos Costa will speak at 09:00 CET. In the US Fed FOMC members Narayana Kocherlakota (non-voter, dove), John Williams (voter, neutral) and Jim Bullard (non-voter, hawkish) will speak.
IEA is scheduled to publish its monthly oil market report at 10:00 CET. Moody's may publish a review of Ireland's debt rating. Upgrade of Ireland's current Baa1 (stable) rating is possible.
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