Market Movers ahead
In the euro area, we expect the PMIs to have moved broadly sideways in February but nonetheless still suggesting a firmer recovery in early 2014.
Minutes from the January Fed meeting are expected to show a strong consensus among FOMC members to continue the current tapering course.
In the UK, the unemployment rate is January is expected to decline to the 7.0% threshold for the old forward guidance from the Bank of England.
In China, we expect Markit/HSBC manufacturing PMI to continue to edge lower in February, possibly challenging the recent improvement in EM sentiment.
In Japan, we expect Q4 GDP to confirm that the recovery so far remains firm and that the Bank of Japan is not expected to add new stimulus in connection with next week's meeting.
Global macro and market themes
US data has been weaker than expected, suggesting weak Q1 GDP growth and a clear downside risk to our H1 14 growth outlook.
The Fed's bar for changing its unofficial tapering plan remains high, but it may be forced to pause its tapering in May.
The weaker growth picture leaves risk assts vulnerable and downward pressure on yields persists.
Inflation stayed subdued at 2.5% y/y in January and leaves the Peoples Bank of China room to ease if needed.
In Sweden, the Riksbank is on auto-pilot but there is still a strong chance it could be forced to lower rates during the spring.
In Norway, stronger GDP growth in Q4 and higher inflation in January have closed the door for a rate cut any time soon.
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