GBP

Inflation fell below the Bank of England’s 2% target for the
first time in more than four years in January, brightening the outlook for
Britain’s squeezed consumers.

GBP

Inflation fell below the Bank of England’s 2% target for the
first time in more than four years in January, brightening the outlook for
Britain’s squeezed consumers.

The annual rate of inflation dipped to 1.9% last month from 2%
in December, according to the Office for National Statistics, driven lower by
prices of furniture and other household goods, alcohol and tobacco, DVDs and
tourist attraction entry costs. This caused the pound to weaken off as it
lowers the expectations that the Bank of England will raise interest rates in
the medium term.

UK house prices increased 5.5% in January, although the
London effect has skewed the headline figure showing an increase of 12.2%.
Prices in Scotland showed the smallest increase as they prepare for a
referendum vote rising just 0.5%

EUR

In Germany the ZEW monthly poll of economic sentiment
dropped to 55.7 from 61.7 in February falling well short economists’
expectations of 63.2. It was the lowest reading since November. However the majority
of surveyed financial market experts remain optimistic about the economy.

USD

US homebuilder confidence suffered its biggest ever drop in
February, hit by the severe winter weather and worries about labour and
building costs. The National Association of Home Builders/Wells Fargo index
dropped from 56 in January to 46, the first time since May it was below the 50
level.

Today

We have a number of figures out of the UK with mortgage
approvals; Bank of England minutes released from their rate announcement as
well as December unemployment figures. In the afternoon in the US we have
January Building permits and housing starts, both expected to show mixed
figures.

Key Announcements:

09:30am – GBP – Bank of England Minutes.

09:30am – GBP – BBA Mortgage Approvals (Jan): Previously
46,500.

09:30am – GBP – ILO Unemployment Rate (3M) (Dec): Expected
to remain at 7.1%.

13:30pm – USD – Building Permits (MoM) (Jan): Expected to
fall to 980,000

13:30pm – USD – Housing Starts (MoM) (Jan): Expected to fall
to 950,000

19:00pm – USD – FOMC  Minutes.