Focus On ECB Rate Decision And Eurozone CPI Inflation This Week

Focus On ECB Rate Decision And Eurozone CPI Inflation This Week

Inflation in the US, as measured by the Consumer Price Index (CPI), rose to 0.4% in December from 0.2% in November, the report published by the US Bureau of Labor Statistics showed on Wednesday. On a yearly basis, the CPI edged higher to 1.4% and came in higher than the market expectation of 1.3%.

Moreover, Annual Core PPI edged lower to 1.2% in December vs. 1.4% expected. The Producer Price Index (PPI) in the US for final demand rose to 0.3% on a monthly basis in December from 0.1% in November.

The US Dollar moved higher Friday after President-elect Joe Biden outlined his plans for additional stimulus.

Looking ahead, the economic calendar will bring an update on the health of the U.S. economy, with reports on US Housing Starts, Building Permits, Crude Oil Inventories, and Existing Home Sales.

US Housing Starts will be announced Thursday and it is a critical indicator of economic strength in the US. The market expects housing starts to rise to 1.560 mln in December from 1.547 mln.

US Building Permits as another key indicator of demand in the housing market measure the change in the number of new building permits issued by the government. It is expected to come out at 1.1.604 mln in December.

In addition to the US data, the European Central Bank will announce its rate decision and forward guidance on Thursday. European Central Bank announced extra stimulus in December, but the economic outlook has been clouded again by the discovery of new Covid-19 strains and the relatively slow pace of the vaccination rollout. We might see a response from ECB for the economic risk posed by the coronavirus threat. 

Moreover,  focus on the Consumer Price Index in the Eurozone. On a year-on-year basis, the Eurozone CPI is expected to stay to -0.3%. A lower than expected reading will be negative for the single currency.

18 Jan 21 (Mon)

06:09 am

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