Research Team at TDS sees upside for CPI for December, a headline reading of 1.5% y/y (mkt 1.4%) but any market reaction to stronger inflation data should be limited, with all eyes on PM May’s Brexit speech.
“Judging from the weekend press, the speech is going to have a bit more content than what we had expected, with May reportedly going to confirm that the UK is prepared to leave the single market in order to gain control over immigration. Another thing we’ll be watching for is what May says about the possibility of a transition agreement, as a long transition agreement will give firms much more time for a gradual adjustment to Brexit, and pushes the actual event much further into the future.”
“EUR: Germany ZEW survey for January, and we’re more or less in line with expectations in looking for gains of a couple of points for both current conditions and expectations. We also get the ECB’s quarterly bank lending survey this morning, where we’ll be watching to see how Eurozone banks are faring with continuing low rates.”
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