STIR: January Flash PMIs Due From 0815GMT/0915CET

The January flash PMIs headline this week’s regional data calendar. Current Bloomberg consensus expects the Eurozone composite PMI (due 0900GMT) little changed at 49.7 (vs 49.6 in December). The manufacturing component is expected to improve slightly to 45.4 (vs 45.1 prior), while services is seen at 51.5 (vs 51.6 prior).

• At a country level, small composite improvements are expected in Germany (cons 48.3 vs 48.0 prior, due 0830GMT) and France (cons 47.7 vs 47.5 prior, due 0815GMT).
• The PMIs will be one of the few signals of economic activity ahead of the ECB's Jan 30 decision, with Q4 flash GDP data not due until the morning of the rate announcement. While unlikely to shift consensus away from 25bp cuts in January and March (which remain essentially fully priced in ECB-dated OIS), the PMIs will help set the tone for sentiment with questions around the likely pace and magnitude of ECB rate cuts later this year including a potential return to neutral by mid-year.
• US President Trump’s inauguration will just about fall into the January survey period (which usually closes 2 business days before the release date). However, with no specific policies imposed against the EU at this stage, we don’t expect this to meaningfully skew the results – uncertainty around trade policy, particularly amongst manufacturers, remains high.
• Euribor futures are flat to +2.5 ticks through the blues, rallying post-settlement on Trump’s comments around not wanting to impose tariffs on China.
• ECB President Lagarde will speak in a panel on the “The Global Economic Outlook” at 1000GMT, with Cipollone speaking on CBDC’s at 1100GMT.