MNI European Morning Briefing

     LONDON (MNI) - A busy morning awaits Tuesday, beginning at 0630GMT when

France releases their non-farm payroll figures. This is followed by Spain

releasing their final HICP figures at 0800GMT with previous m/m HICP at 0.1% and

y/y HICP at 1.2%.

     At 1000GMT the US release the NFIB Small Business Optimism Index.

     This is followed by their much anticipated CPI figures at 1230GMT. Analysts

are expecting energy prices to decline after January's 3.0% rebound as well as

softer readings for apparel and health care after January spikes.

     MNI's median of forecasts suggests an inflation figure of 0.2% for both CPI

and EPI ex-food, energy. MNI forecast misses for CPI m/m over the last twenty

years can be seen below.

     At the same time, Mr. Hammond will present the Spring Statement for the UK

Budget. Whilst UK near term borrowing needs are likely to be revised lower which

would suggest a rosy short-term picture, the increased likelihood of Bank Rates

rising earlier and more than previously assumed combined with an ageing

population placing greater demands on the public sector suggest UK public

finances face a tougher time ahead.

     The impact of the Bank Rate on public finances is noted with Thomas Pope,

analyst at the Institute for Fiscal Studies, telling MNI the Bank's quantitative

easing makes debt interest payments highly sensitive to change in Bank Rate with

every anticipated 100 basis point Bank Rate increase adding stg4.4 billion in

debt interest payments.

     The afternoon is like the calm after the storm with very little juice left

in the calendar. At 1255GMT, the US Redbook Retail Sales Index is released and

1415GMT sees BOC Governor Stephen Poloz's speech on "Today's Labour Market and

the Future of Work" at Queen's University, Kingston, Ontario.

     For those who want a little bit more, stay up till 2350GMT and Japan will

release their machinery orders with a m/m forecast of 6.6% aiding the poor

-11.9% m/m growth prior.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com