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Day Ahead: Top 3 Things to Watch

What to watch out for in tomorrow's session

US Consumer Inflation, Retail Sales

Market participants look ahead to the release of a duo of reports on retail sales and inflation with the latter expected to garner added investor attention as bond yields jumped in recent sessions amid expectations for a faster pace of inflation, which, in turn, led to a selloff in equities.

Investor expectations for a faster pace of inflation grew recently following bullish CPI data in January and an uptick in wage growth reflected in the nonfarm payrolls report. A softer CPI report on Wednesday, however, could lead many to question whether investor expectations for a faster pace of price increases were premature.

Analysts expect inflation cooled to a 1.7% year-on-year rise in January, compared to 1.8% in the previous month.

Retail sales growth is expected to show an unchanged reading of 0.5% in the wake of faster wage growth and higher household spending.

The dollar has struggled to add to last week’s gains, falling for the second straight day against a basket of major currencies.

Energy Information Administration Weekly Inventory Report

A fresh batch of inventory data from the Energy Information Administration (EIA) on Wednesday is expected to show that U.S. crude stockpiles rose for a third-straight week.

Analysts forecast crude inventories rose by about 2.8 million barrels in the week ended Feb 9.

Crude oil futures settled lower on Tuesday following a report from the International Energy Agency forecasting a ramp up in US shale production,

Eurozone, German Fourth Quarter Gross Domestic Product

The Eurozone’s preliminary fourth quarter GDP is expected to show a quarter-on-quarter rise of 0.6%, matching the growth rate in the previous quarter, while the economists forecasts year-on-year GDP rose 2.7%.

Germany, Europe’s largest economy, is also slated to reveal preliminary fourth quarter GDP expected to show a quarter-on-quarter rise of 0.8%.

The euro has started the week positively against the dollar, notching two-straight days of gains as Germany closes in on deal to form a grand coalition.

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