A quiet start to the week, with no major economic events on the calendar.

US CPI

The US CPI is expected to show a modest re acceleration, with headline CPI seen around 0.3% m/m and roughly 2.7% y/y. Core CPI is similarly forecast to print near 0.26–0.31% m/m and about 2.7% y/y, a touch firmer than November. This comes after the prior core CPI release surprised to the downside, printing 2.6% y/y versus a 3.0% consensus, which reinforced market confidence that inflation pressures are easing. Consensus data would likely keep the Fed on hold at the next meeting, sustaining rate-cut discussions for later in 2026 without urgency. A softer-than-expected print would strengthen rate cut odds, supporting risk assets and lowering yields. Conversely, a surprise to the upside especially in core would delay cut expectations, lift front-end yields and the dollar, pressure growth equities.

US PPI

PPI just after the CPI is very crucial for the markets as this data serves as a key CPI confirmer with any tariff-driven goods acceleration potentially challenging the Fed's path to 2% inflation. The US PPI report hits the wires a hour prior to US session open, with forecasts calling for headline and core around 0.3% monthly and 2.7% yearly steady producer costs through tariff pressures. If it lands in line, the Fed stays patient at their late-January meeting, keeping 2026 rate-cut chatter alive. A cooler print boosts cut hopes, easing yields and lifting stocks. Higher print especially core flags sticky costs, delays easing, hikes yields and the dollar and knocks growth stocks. Markets remain highly sensitive given to the incoming data as recent disinflation figures have surprised many.

Retail sales

Economists are looking for a 0.4% monthly bump after October's flat reading. Core sales excluding autos should hit around 0.3%, showing consumers hanging in there despite sticky rates. If it comes in as expected, it backs up the soft-landing story without shaking up Fed rate-cut plans. A hotter surprise over 0.5% would scream strong demand, maybe pulling back those 2026 cut bets and nudging yields higher. Weaker numbers below 0.2%, though, could spark slowdown fears, ramp up cut hopes, and hit stocks while easing bonds.

UK GDP

The UK will release its monthly GDP data, giving a fresh read on how the economy ended last year. Recent data has been weak, with GDP unexpectedly contracting by 0.1% in October, which has lowered expectations going into this print. Most signals suggest growth will be flat or only marginally positive at best, as services remain soft and construction activity has cooled. There isn’t a clear consensus forecast yet, but the overall tone is cautious. Another weak or negative reading would reinforce expectations that the Bank of England may lean toward rate cuts. A stronger print would support sterling, though that’s not the base case markets are positioned for.

US Industrial Production

Expectations point to a modest rise of around 0.2%, similar to the previous month. While output has shown small improvements recently, the broader manufacturing backdrop remains soft, with surveys still signaling contraction. Capacity utilization is also expected to stay largely unchanged, suggesting factories are not operating at full strength. A stronger print would help ease concerns around the manufacturing slowdown and support the dollar. A weaker outcome would reinforce the view that industrial momentum remains fragile.