| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 07:00 | Germany | Industrial Production s.a. (MoM) | November | -0.3% | 0.2% | -0.7% |
| 10:00 | Eurozone | Unemployment Rate | November | 6.5% | 6.5% | 6.4% |
USD appreciated against most of its major counterparts in the European session on Tuesday as investors continued to await the release of the US December inflation report later in the week, which could bolster the repricing of bets on a spring cut in the Federal Reserve’s interest rates.
The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, rose by 0.19% from the previous close to 102.40.
On Thursday, investors will receive a key US inflation report for the final month of 2023. Economists predict it will show a marginal rebound in the headline CPI - to 3.2% YoY from 3.1% YoY in November, and further deceleration in the core CPI - to 3.8% YoY from 4.0% YoY.
The New York Fed's survey of consumer expectations for December, released yesterday, showed reduced inflation expectations across all horizons, with the year-ahead forecasts for price increases coming in at 3.0%, the lowest level since January 2021.
The survey’s findings reinforced bets that the first decrease in the Fed’s interest rates is to be approved in spring. Markets are now seeing a 60% probability of a March rate cut and a 92% chance of the move in May, according to the CME FedWatch Tool.
Meanwhile, another Fed official - the central bank’s governor Michelle Bowman - suggested that monetary policy in the U.S. is sufficiently restrictive to return inflation to the 2% target. She said last night that she believes the inflation rate could decline further without more rate increases. "Should inflation continue to fall closer to our 2% goal over time, it will eventually become appropriate to begin the process of lowering our policy rate to prevent policy from becoming overly restrictive," Bowman added.