Central Bank meetings in Canada, Japan and Europe set to headline this week.

Last week, sticky UK inflation, and strong US data impacted markets. A number of ECB officials, including President Lagarde pushed back on market expectations for rate cuts in the early part of this year. In the UK, both headline and core CPI rates printed above the expected figures.

Central Bank meetings in Canada, Japan and Europe set to headline this week. The European Central Bank are expected to hold rates at current levels, with the main interest from markets being on the statement after the figure is released. If ECB President Lagarde gives a clearer outlook on when we can expect rate cuts then we could see the euro weaken, therefore giving potential for the GBP/EUR rate to go up. On the flip side if she gives a more hawkish view this will most likely see the GBP/EUR rate around current levels as markets are waiting for indications on interest rate cuts. 

Although Monday there will be little in terms of data to move the markets, as we progress through the week there will be plenty of data points which will bring volatility to the markets. Wednesday there are PMI figures from the US, UK and EU which have seen poor readings in recent months from the EU. The UK and US have not had as poor PMI figures with only manufacturing being the figure coming out below 50.

In the US on Thursday we have Durable Goods Orders which is expected to see a decrease from 6.5% to 1% which could see dollar weakness as the week draws to an end. We also have US GDP which is expected to drop from 4.9% to 2%, showing a potential slowdown in the US.