Euro area money supply data covering November are due for publication. M3 growth slowed during most of last year and the consensus expectation is for a low reading of 1.5% y/y. While the European economy is recovering, low credit growth remains a concern and together with low inflation should keep the window open for the ECB to ease monetary policy further.
Spanish and Italian December flash HICP figures are released ahead of the euro inflation number next week, which we expect will decline mainly as a result of a decline in German inflation, (German inflation set to fall to 0.9% in December). Spanish inflation is expected to remain unchanged at 0.3% reflecting higher core inflation and lower energy and food inflation. Italian inflation is expected to decline to 0.6% in December but there remains upside risk to Italian inflation from the VAT hike to 22% in October.
Several FOMC speeches including an address by Chairman Bernanke tonight.
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