In the US, the data calendar is light and we expect focus to remain on Donald Trump's policies. One game changer may be the confirmation of Steven Mnuchin as Treasury Secretary.
In the euro area, the first release of interest is Sentix investor confidence. Sentix trended upwards in H2 16 and reached 18.2 in January 2017, its highest level since August 2015. The current situation and expectations components have both risen to historically high levels but we have seen a loss of momentum in both ZEW and ifo expectations, which could be a drag on Sentix expectations. Therefore, we expect Sentix to rise marginally to 19.0 in February, possibly dragged down by a declining expectations component.
We are also due to get German factory orders for December today. Factory orders have followed a rising tendency since 2013 but have experienced large fluctuations, with a 5% monthly increase in October and a 2.5% decline in November. We expect a bounce back in December, with monthly growth of 2%. Our view of another increase is supported by the manufacturing PMI in November and December, which showed strength in the new orders indicator.
In the UK, there are no significant data releases. The main event in the UK this week is the House of Commons vote on the Article 50 bill on Wednesday. The vote is expected to be passed and put the government on course to trigger Article 50 on 9 March as planned.
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