The annual growth rate of the broad monetary aggregate M3 decreased to 4.7% in December 2015, from 5.0% in November, averaging 5.0% in the three months up to December. Analysts were expecting increase to 5.1%. Euro area annual inflation is expected to be 0.4% in January 2016, up from 0.2% in December 2015, according to a flash estimate from Eurostat, the statistical office of the European Union. This was in line with market forecasts. Looking at the main components of euro area inflation, services is expected to have the highest annual rate in January (1.2%, compared with 1.1% in December), followed by food, alcohol & tobacco (1.1%, compared with 1.2% in December), non-energy industrial goods (0.7%, compared with 0.5% in December) and energy (-5.3%, compared with -5.8% in December).

 

In the US session, GDP, Chicago PMI and Revised Consumer Sentiment figures were published. Real gross domestic product increased at an annual rate of 0.7% in the fourth quarter of 2015, missing forecasts on 0.8% increase. In the third quarter, real GDP increased 2.0%. The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), residential fixed investment, and federal government spending that were partly offset by negative contributions from private inventory investment, exports, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

 

The University of Michigan final index of sentiment dropped to 92 from 92.6 in December, backtracking from a preliminary January reading of 93.3. The median projection in a Bloomberg survey called for 93. “Most of the downward revisions that occurred in late January were due to stock market declines, reflected in the erosion of household wealth as well as weakened prospects for the national economy,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement.

 

The Chicago Business Barometer bounced back sharply in January, increasing 12.7 points to 55.6 from 42.9 in December, the highest pace of growth in a year. Analysts were expecting smaller incline to 45.6. The latest increase followed extreme weakness in the fourth quarter, with the Barometer averaging 47.7, the weakest quarterly growth since Q3 2009. The three month trend remained depressed at 48.7, up only slightly from 47.7 in December.

 

From Eurozone on Monday Spanish and Italian Services PMI data is scheduled for a release. Analysts predict decline to 52.7 in Spanish and to 54.9 in Italian PMI data. In the US session, also, Manufacturing PMI figures are scheduled for a release. Slight increase to 48.6 is forecasted.

 

Figures to watch:

 

Spanish Manufacturing PMI (Monday 9:15)

Italian Manufacturing PMI (Monday 9:45)

ISM Manufacturing PMI (Monday 16:00)