Today's news headlines: 

‘Inflation seen below ECB’s goal in 2023 in draft EU forecasts’. A draft from the European Commission suggests that Euro Area inflation will slow to 1.7% in 2023 after averaging 3.5% in 2022. The projections, which could change before publication, put inflation below the European Central Bank’s target of 2.0% next year, raising doubts over how aggressively the central bank will raise interest rates this year. Although December’s ECB forecast also projected inflation to be below 2.0% in 2023 and 2024, ECB President Christine Lagarde recently stated that inflation is ‘likely to remain elevated for longer than previously expected’. (Bloomberg)

‘Russia starts military drill near NATO borders’. Russia and Belarus have begun large cooperative military drills near the Ukraine border despite repeatedly claiming it doesn’t plan to invade. The exercises, which are also taking place near Poland and Lithuania, are expected to run until February 20th and are being closely watched by the US and Europe. (Financial Times)

Today

European equity futures climbed following strong earnings releases, while US equity futures, treasuries, and the US Dollar remained steady ahead of this afternoon’s US inflation release. European bond yields edged higher while oil prices climbed to $90 per barrel.

Events

US Initial Jobless Claims (Feb 5th): 1:30PM
US Consumer Price Index YoY (Jan): 1:30PM

Interbank rates:

GBP/USD – 1.3550
GBP/EUR – 1.1860
EUR/USD – 1.1425
USD/CAD – 1.2670

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