The preliminary set of December’s Eurozone CPI figures headlines an otherwise lackluster European economic data docket. The headline year-on-year inflation rate is expected to hit 1 percent, the highest since September 2013. As with yesterday’s analogous release from Germany however, the outcome may not do much for the Euro considering its limited implications for the direction of ECB monetary policy after the central bank committed to on-going QE through 2017.
Later in the day, the spotlight turns to minutes from last month’s FOMC meeting. Traders interpreted the outcome as broadly hawkish as policymakers upgraded their growth and inflation forecasts and projected three rate hikes in 2017 compared with September’s call for two. Chair Yellen tried to downplay this narrative however, stressing that much depended on the still-uncertain evolution of fiscal policy. A similar tone in the Minutes release may cool bets on aggressive tightening, weighing on the US Dollar.
The Yen underperformed in overnight trade as Japan’s benchmark Nikkei 225 stock index roared higher upon its return from the New Year holiday, with prices poised to score the largest daily advance in two months. Not surprisingly, this weighed heavily on the perennially anti-risk currency. The Australian Dollar advanced, rising alongside front-end bond yields to suggest that a supportive shift in RBA policy bets offered fuel for the upward push.
See the schedule of upcoming webinars and join us LIVE to follow the financial markets!
Asia Session
European Session
** All times listed in GMT. See the full DailyFX economic calendar here.
Â
