We have a very busy week ahead of us with two central bank decisions on the agenda, the RBNZ and the Riksbank, another Parliamentary debate on Brexit, a new round of US-China trade talks, and several economic releases, including the 1st estimate of the UK GDP for Q4 and January inflation data from both the UK and the US. What’s more, on Friday, the US government may be headed for another shutdown if the Congress does not agree on a budget plan throughout the week.
On Monday, during the European day, we get inflation data for January from Switzerland and expectations are for a tick down to +0.6% yoy after December’s slide to +0.7% from +0.9%. At their last meeting for 2018, SNB officials kept their benchmark rate unchanged at -0.75%, reiterating that they will remain active in the FX market as necessary and repeating that the Swiss franc is highly valued. They also revised down their inflation projections, suggesting that inflation is unlikely to hit their 2% target during their forecast horizon, even with interest rates staying at current levels. Although a +0.6% yoy inflation rate would be above the Bank’s estimates for the first quarter of 2019, which is at +0.5%, it would still be well below the Bank’s objective. Therefore, we see it unlikely for SNB policymakers to be tempted to alter their policy stance soon.
From the UK, we get the 1st estimate of GDP for Q4, industrial and manufacturing production for December, as well as the...
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