UK PPI data was slightly mixed with input prices coming in below expectation but the core output above at 0.4% vs. 0.2% expected.Today’s focus will be on the consumer price index. CPI is expected near target at 2.1%. This would help paint a picture of what the Bank of England are likely to do in terms of monetary policy. A big jump in inflation is unlikely, but this might just push back rate cut expectations. We see little support from the release.The pound remains under pressure with the news that Tesco’s Christmas period sales came in lower than expected. Sales rose 3.1% y/y but this was below the consensusof 4.0%. The German ZEW index will be released this morning. This is considered a major print for the Eurozone and has slipped of late. This would indicate a slowing in activity, and is expected to ease further. However, given the euro’s strength it would have to be significantly lower to have a marked effect.US retail sales figures are out today. These should be poor and fuel speculation of a possible 50bp cut this month.NZ business confidence rose to -26 from -27 the month before. GBPNZD has fallen to new 2-year lows. The commodity basket as a whole is performing well against the weak pound, with GBPAUD at a 10-year low.