German HICP inflation is due to be released today and we expect it to reach 1.9% for the first time since 2013. With German inflation back around the ECB's 2% target, German scepticism about the very loose monetary policy is likely to intensify, but the latest comments from ECB President Mario Draghi clearly confirmed that the ECB will only react to higher inflation when it is seen across the euro area and there is a sustained adjustment in the inflation path. Related to this, the rise in both German and euro area inflation is lifted mainly by higher energy prices whereas the underlying inflation remains low as reflected by German core inflation at only 1.1% on average in 2016. The euro area HICP inflation figure for January is due to be released tomorrow.
The European Commission's economic confidence indicator is due for release today. The latest figure for December was at the highest level since 2011 and pointed to yearly GDP growth around 2.5%. Last week, we got some early indications that the current strong economic sentiment will not prevail, but we expect the signals related to the current situation to remain strong in the release today.
Later this week, there are a number of important events, including the FOMC meeting on Wednesday and the January US jobs report due to be released on Friday. The Bank of England (BoE) meeting on Thursday and the Bank of Japan two-day monetary policy meeting ending on Tuesday will also attract some attention.
In Scandinavia, focus is on Norway today with the release of the retail sales figure for December and industrial confidence for Q4. For more info, see Scandi Markets on page 2.
UGB announces results for 2016
UGB’s profit attributable to shareholders of the parent for 2016 decreased to $6.3 million compared to $11.2 million in 2015, with a similar decrease in basic earnings per share to 0.77 cents from 1.