The European Central Bank (ECB), like the Bank of England, is expected to keep rates on hold when it meets this Thursday. Fourth-quarter GDP data, released next Friday, emphasises its dilemma.
Last week’s initial estimate revealed slightly stronger than expected growth (driven in part by a healthier German manufacturing sector), a trend that’s likely to be confirmed in Friday’s data. That would seem to bolster the ECB’s decision to have paused rate cuts since June 2025. But the euro’s appreciation against the US dollar, as well as the risk of delayed impacts from US tariffs, creates downside risk. Economists’ base case is that the central bank will extend its pause through most or even all of 2026.
Eurozone: Sentix investor confidence
Japan: Current account, M2 money supply, trade balance
UK: BRC retail sales
US: Imports/exports, retail sales
China: CPI inflation, PPI inflation
Japan: Machine tool orders
US: CPI inflation
Japan: Producer price index
UK: Index of services, industrial production, Q4 GDP (preliminary), Rics house price survey, trade balance
China: M2 money supply
Eurozone: Employment (preliminary), Q4 GDP (preliminary), trade balance