Market focus will remain on the development in emerging markets. At this stage we do not expect the emerging market wobbles to be enough to prevent Fed to continue tapering in connection with the FOMC meeting on Wednesday.
In the data calendar the main event is the German IFO-business survey for January. The improvement in German PMI in January suggests that IFO continued to power ahead in January and our expectations for IFO are slightly ahead of consensus. In addition, new home sales for December will be released in the US. These are expected to have eased slightly the second month in a row partly on the back of bad weather conditions.
The Eurogroup finance ministers are scheduled to meet this afternoon and the bank union will be on the agenda again. The main hurdle remains an agreement on a framework for direct capitalisation of banks. It is also possible that the finance ministers will start to discuss an exit plan for Portugal from its current aid programme.
To Read the Entire Report Please Click on the pdf File Below