Prepare to go negative
- This week is mainly about the ECB - as not even the prospect of US employment data is likely to detract from the sight of a major central bank (and custodian of a reserve currency) taking interest rates negative.
- German inflation is due for release, with the forecast at 1.1% yoy. There is a very real risk, of course, that inflation in countries like Germany will rise to coincide with rates going negative. Euro manufacturing sentiment is expected to show a slight slowing in the pace of expansion.
- The US ISM manufacturing sentiment data is expected to show an acceleration of economic activity (in line with other sentiment indicators). Of course, unlike the Euro area, regional divergence in the US data is of limited interest.
- The UK is offering consumer credit data, which is of note in the wake of the stronger house prices last week. The Bank of England's principle concern must be signs of too rapid growth in leverage for either banks or the consumer.
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