Market themes of the Day: Low FX market liquidity on President’s Day

What you need to know before markets open
Main themes: 

• The UK retail sales rose more than expected in January with a 1.0% monthly increase.
• The US banks will be closed in observance of Presidents' Day with FX market liquidity low.

Europe

• The slowdown of the European economy is “significant” and the ECB could change its interest-rate guidance if it becomes clear the situation isn’t temporary, the ECB Governing Council member and the governor of Banque de France Francois Villeroy de Galhau said for Spanish El Pais over the weekend.
• The Finnish central bank governor and the ECB Governing Council member Olli Rehn said that recent data point to a weakening the Eurozone economy,  adding that interest rates would remain at the current level until monetary policy goals have been met. “Yes, the most recent data point to a weakening of the economy,” Rehn said for German business daily Handelsblatt on Sunday.

UK 
The UK total retail sales rose unexpectedly strongly by 1.0% over the month in January while core retail sales adjusted for motor fuels rose 1.2% m/m.

US

• The US industrial production fell -0.6% m/m in January missing the market estimate.
• The University of Michigan consumer confidence rose to 95.5 in February, up from 91.3 in the previous month.
• San Francisco Federal Reserve President Daly said no 2019 rate rise is needed if the economy performs as expected with the upside surprise to the US growth bringing the rate hike back into play.
• Atlanta Federal Reserve Bank President Raphael Bostic does not see the evidence that the US economy is slowing faster than expected and still expects growth at or slightly above trend. “We are still a little short of neutral rate territory but in no rush to move policy again. I see one rate increase this year,” Bostic said.