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UK Data
  

• Tuesday 11.00am CBI Distributive Trades for January. Previous 8.0% Bal
• Wednesday 9.30am Mortgage Approvals for December. Previous 83.0k
• Thursday 7.00am Nationwide house Prices for January. Previous 4.8%y/y
• Friday 9.30am CIPS Manufacturing PMI for January. Previous 52.9 index

Last week commenced in volatile form; with £77 billion wiped off the UK’s index of leading shares on Monday before shares retraced higher in the latter half of the week. The continued deterioration of the housing sector was confirmed as Rightmove house prices fell in January to their lowest levels since December 2005. Meanwhile, it was reported that the Bank of England voted 8-1 to keep the benchmark interest rate unchanged at 5.5% this month, as inflation concerns led the majority to ignore a call from David Blanchflower for a second consecutive cut to spur the economy. The emphasis remains on the housing sector this week, with the market looking towards mortgage approvals and the Nationwide house price survey for any signs of further slowdown in the housing market.

US Data

• Monday 3.00pm New Home Sales for December. Previous 647k
• Tuesday 1.30pm Durable Goods Orders for December. Previous -0.1%m/m
• Tuesday 3.00pm Consumer Confidence for January. Previous 88.6 index
• Wednesday 1.30pm GDP for Q4. Previous 4.9%q/q Annualised
• Wednesday 7.15pm FOMC Interest Rate Announcement
• Thursday 2.15pm Chicago PMI for January. Previous 56.4 index
• Friday 1.30pm Non-farm Payrolls & Unemployment Rate for January. Previous 18k & 5.0%
• Friday 3.00pm ISM Manufacturing Survey for January. Previous 47.7 index
• Friday 3.00pm University of Michigan Sentiment Survey for January. Previous 80.5 index

Last week was expected to be relatively quiet, in terms of US data. However, in spite of this, the US Federal Reserve stole the show; announcing an emergency rate cut on Tuesday. The Fed cut by 0.75% from 4.25% down to 3.5%, the first emergency reduction since 9/11. The Committee took action after Asian and European stock markets tumbled citing concerns about a weakening economy and turmoil in the financial markets, all adding to signs of a US recession. While the initial reaction was relatively muted, the Dollar weakened against the Euro and Sterling later on in the day, while the trend continued throughout the week. This week sees a plethora of data released, where the FOMC interest rate announcement remains the key highlight

EU Data

• Thursday 10.00am Eurozone Unemployment for December. Previous 7.2%
• Thursday 10.00am Flash HICP for January. Previous 3.1%y/y
• Friday 9.00am Manufacturing PMI for January. Previous 52.6 index

The Euro remained relatively un-phased last week, as little surprised the market in terms of data releases. Industrial new orders were reported stronger than expected, while German corporate sentiment also unexpectedly rose, however the majority of responses were taken before the stock market turbulence. The ECB is under pressure to lower interest rates after the US Federal Reserve's emergency move this week. However, with Eurozone inflation at 3.1%y/y, considerably above the ECB’s 2.0% CPI target, the Central Bank will not bow easily to such pressures. Eurozone unemployment is the key release this week and expected to continue its downward bias.

Interest rate outlook