In the US new home sales are expected to decrease further in January, after weak December figures. The main reason for the decline is still the bad weather, which had a solid impact on new home sales. Combined with the recent weak housing data we believe a further decline is to be expected despite the sharp fall in December. The slowdown in US housing is also evident from declining mortgage applications.
Fed's Rosengren (non-voter, dove) will provide an economic outlook in Boston.
ECB's Mersch is due to speak today and focus will be on a continuation of the dovish tone from other prominent ECB members. Any comments related to the ECB's toolbox will get most attention, as it seems that the discussion within the ECB is not about whether to ease again but rather about which instruments to use.
In the UK, the second release Q4 GDP is expected to be unrevised from the preliminary first release of 0.7% q/q with the possibility of an upward revision due to the strength of the PMI surveys in Q4. Moreover, the breakdown is likely to show that private consumption was growing around 0.6-0.8% in line with previous quarters and that investments expanded at a faster pace.
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