Market movers today
Euro-area industrial production is likely to show a decline in December following the strong gain of 1.8% m/m in November. Most euro countries have published declines in industrial production for December.
In the UK the event of the week will be today's Bank of England Inflation Report (IR). The MPC has indicated that the forward guidance framework will be reviewed in the IR as unemployment has come down rapidly to 7.1%. Although a wide range of options are available (e.g. lowering the threshold to 6.5%, shifting to another target measure etc.), we expect a shift towards more qualitative guidance. We believe the MPC will come to the same conclusion as the Fed and prefer softer communication instead of tying itself to a new measure. We would expect the general message to be that the economy still needs low interest rates, that the MPC sees no immediate need to raise rates and that, when time comes, the move higher will be very gradual.
Two ECB speeches today: chief economist Peter Praet (12:10) and president Mario Draghi (16:30).
In Scandinavia focus will on Norwegian Q4 GDP, which we expect to show 0.5% q/q growth.
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