From Eurozone, on Wednesday, Industrial Production figures were released. In October 2017 compared with September 2017, seasonally adjusted industrial production rose by 0.2% in the euro area (EA19) and by 0.3% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In September 2017, the industrial production fell by 0.5% in both zones. In October 2017 compared with October 2016, industrial production increased by 3.7% in the euro area and by 4.2% in the EU28.

From Eurozone, on Thursday, French and German PMI figures were released. French private sector output remained strong in December, boosting the economic outlook for the euro zone’s second largest economy according to data released on Thursday. The preliminary reading of the Markit services purchasing managers’ index dipped to 59.4 this month from 60.4 in November. Economists had forecast a reading of 59.9. The manufacturing PMI rose to an almost 17-and-a-half year high of 59.3, compared to expectations for 57.2 and up from 57.7 a month earlier.

Private sector output in Germany expanded at the fastest pace in more than six-years in December, fueling optimism over the health of the euro zone's largest economy, preliminary data showed on Thursday.. The preliminary German manufacturing purchasing managers’ index climbed to a record-high of 63.3 from a final reading of 62.5 in November. Analysts had expected the index to slip to 62.2 this month. The flash services purchasing managers’ index rose to a 24-month peak of 55.8 from 54.3 in November, above expectations for a reading of 54.7.

However, the focus of the session was on ECB interest rate decision and the following press conference. ECB left it monetary policy and its forward guidance unchanged from its last meeting. Then it announced that its asset purchases would be halved starting in January to 30 bln euros a month through September 2018.  The ECB reiterated that official rates will be remain at their present level well past the end of the net asset purchases.  It indicated that QE would continue until the end of September, but will "run until the inflation path is sustainably adjusted.  The ECB sees domestic generated price pressures as continuing to be "muted." This means ta sustained uptrend in price trend remains elusive.

The ECB's staff forecast raised growth forecasts "substantially" and made minor adjustments to its inflation projections. Turning to growth first, the staff raised this year's GDP forecast to 2.4% from 2.2%, and next year's growth was raised to 2.3% from 1.8%. The GDP forecast for 2019 was raised to 1.9% from 1.7%, and for the first time, introduced a 2020 GDP forecast of 1.7%. The forecast suggests growth momentum is peaking or will peak shortly. The minor adjustments mean that this year's inflation forecast was unchanged at 1.5%, while raising next year's projection to 1.4% from 1.2%.  The 2019 forecast was left unchanged at 1.5% and the 2020 forecast, introduced for the first time at 1.7%.

This week markets will be looking at:

German Ifo Business Climate (Tuesday 10:00)