What are the main events for today?

In the European session, the focus will be on the French and German CPI figures ahead of the Eurozone Flash CPI report next week. In the American session, the attention will switch to the Canadian GDP, the US Core PCE and the US Employment Cost Index.

13:30 GMT/08:30 ET – US December PCE Index

The US PCE Y/Y is
expected at 2.6% vs. 2.4% prior, while the M/M measure is seen at 0.3% vs. 0.1%
prior. The Core PCE Y/Y is expected at 2.8% vs. 2.8% prior, while the M/M
figure is seen at 0.2% vs. 0.1% prior.

Forecasters
can reliably estimate the PCE once the CPI and PPI are out, so the market
already knows what to expect. Therefore, unless we see a deviation from the expected numbers, it
shouldn’t affect the current market’s pricing.

13:30 GMT/08:30 ET – US Q4 Employment Cost Index

The US Q4
Employment Cost Index (ECI) is expected at 0.9% vs. 0.8% prior. This is the most
comprehensive measure of labour costs, but unfortunately, it’s not as
timely as the Average Hourly Earnings data. The Fed though watches this
indicator closely.

Central bank speakers:

• 13:30 GMT/08:30 ET – Fed’s Bowman (voter – hawk)

This article was written by Giuseppe Dellamotta at www.forexlive.com.