| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 07:00 | Germany | Factory Orders s.a. (MoM) | December | 0.0% | 0% | 8.9% |
| 09:30 | United Kingdom | PMI Construction | January | 46.8 | 47.3 | 48.8 |
| 10:00 | Eurozone | Retail Sales (YoY) | December | -0.4% | -0.9% | -0.8% |
EUR weakened against most of its major rivals in the European session on Tuesday as today’s statistics from the euro area corroborated investors’ thinking that the European Central Bank will cut interest rates soon.
Specifically, the ECB’s consumer expectations survey revealed a further decrease in near-term inflation anticipations. According to the survey, the median household saw in December the prices to increase by 3.2% YoY over the next 12 months, down from an upwardly revised 3.5% YoY in November. This was the lowest reading since February 2022.
Adding to the case for monetary loosening, the Eurozone’s retail sales demonstrated a 1.1% MoM drop in December 2023. This was the first decline in three months and the steepest one since December 2022, highlighting a bleak retail landscape in the region. Economists had forecast a 1.0% MoM fall.
On a positive note, the data issued by the Federal Statistical Office showed a surprise 8.9% MoM climb in German factory orders in December. This was the strongest gain since June 2020.
The ECB’s policymaker Pablo Hernandez de Cos acknowledged that the rate-setters are confident that inflation in the euro area is returning to the 2% target and their next move will be a rate reduction. However, he emphasised the timing of the move should be decided based on data.