– Asian stocks and currencies mixed
– UK inflation likely to surprise to the upside
– Spain to sell 12m & 18m bills and Greece to sell 3m bills today
What to watch for today
GBP: Risk of upside inflation surprise. Our economists expect headline CPI to rise to 2.9%yoy in December, higher than the Bloomberg consensus forecast of 2.7%. Given that much of the rise in electricity and gas prices will feed into the index in December, there is a risk that CPI rises above 3% and beyond the Bank of England’s inflation target range. An upside surprise may lend some interest rate spread support to the GBP versus the EUR post the ECB rally in EURGBP.
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