FX Daily

* German ZEW is expected to rise slightly from an already high level. This will underpin the picture of a strengthening growth picture in Germany as also indicated by German PMI and IFO.

* US inflation data will likely show another rise of 0.1% m/m in core CPI, which translates to a rise of 1.2% y/y. CPI is not the Fed’s preferred inflation number. It uses core PCE as its primary inflation gauge but given that inflation is quite far from the Fed’s 2% target, some members are expressing concern about it and it is one factor that would speak in favour of delaying tapering.

* US NAHB housing survey is expected to be flat at 54 after having weakened somewhat in the past 3-4 months. However, other housing data such as building permits and new home sales have recovered lately and we should as a minimum see NAHB stabilise today.

* The Riksbank rate decision will take centre stage in the Scandi markets. We expect a cut by 25bp to 0.75%, accompanied by softer repo rate forecasts.