Although we have postponed our expectations for a first BoE hike to Q1 17 (see also BoE Review: BoE is not 'Fed light' , 4 February 2016), we are still monitoring the key economic figures closely. We expect that CPI inflation (due on Tuesday) increased to 0.4% y/y in January, mainly due to base effects and that CPI core inflation being unchanged at 1.4% y/y.
Today, the German ZEW expectations for January are due to be released. Due to increased global market uncertainty, we expect the figure to drop sharply. This is also in line with the decrease in the Sentix expectations, which also reflects investor confidence, and is usually a good leading indicator for the ZEW expectations (see chart). If this market uncertainty persists, it could end up being a drag on economic growth in 2016 and, in that case, we would have to revise our forecast of a reacceleration in growth.
In the US, focus will be on Empire manufacturing and the NAHB housing index.
In Scandinavia, focus will be on Norwegian GDP, where we expect growth to be flat q/q. See Scandi markets, page 2, 16 February 2016.
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