Research Team at Danske Bank, suggests that the Euro area flash HICP inflation will be in focus today and they expect it to decline back to deflation territory due mainly to the lower oil price.
“Despite the increase in the oil price since mid-January this year, it is still much lower than in February 2015, thereby giving a yearly drag from energy to inflation. The oil price has historically explained around 50% of the monthly variation in inflation.
German retail sales for January are released and we expect a moderate monthly increase of 0.3%. This should follow due to the lower oil price and continued progress in the labour market as well as still-high consumer confidence.
Tomorrow morning before markets open in Europe the Chinese Caixin and official PMI manufacturing are due for release and we look for a slight rise in both.
The rest of the week, focus will be on the US ISM figures and the labour market report , where the average hourly earnings are key for the Fed. In the euro area the unemployment rate should have continued lower.
Today in the Scandis, Danish and Swedish Q4 15 GDP figures together with Norwegian retail sales are published, see Scandi Markets.”
(Market News Provided by FXstreet)