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Divergent directions on policy in Europe

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  • Euro area monetary policy comes into focus with the release of final consumer price inflation data from France and Germany. Any hint of a downward revision would send some parts of the market into paroxysms of hyperbole.
  • We also hear from the ECB and Bundesbank's Weidmann, which may turn out to be the more important event. The Wall Street Journal was suggesting that the Bundesbank might graciously accede to a policy easing if the conditions were right.
  • The Bank of England inflation report, and associated questioning of the governor, gives markets an opportunity to review their views on UK policy tightening. Questions over sterling, and the government's housing market help to buy / bubble scheme are likely.
  • The US is relatively quiet in terms of events. Producer price data is due, but the prospect of hearing from Fed Chair Yellen tomorrow is likely to subdue macro interest for now.

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