22-Feb (USAGOLD) — Gold is little changed on the day after yesterday’s gains faltered just shy of the high for the year at 1763.15. However, the yellow metals ability to rebound from overseas downticks suggest that further tests of the upside may well be in the offing.

The white metals are helping to underpin gold today, amid rising concerns about supply disruptions. An ongoing labor dispute at South Africa’s second largest producer, as well as power issues are at the center of the recent run ups in platinum and palladium.

Hopes surrounding the latest agreement on securing Greece its second bailout have quickly evaporated. I don’t know of anyone that believes another bailout is going to solve the Greek problem. Fitch downgraded Greece to C today, just one-notch above default.

In my humble opinion, either a new government in April will renege on the promises made by the current government, or the Greeks will be right back in the same position — looking for a third bailout — in a couple years when they run through the latest €130 bln that has been pledged. In fact, the FT reported yesterday that there was a “strictly confidential” memo circulating among eurozone finance ministers that says as much: [E]ven under the most optimistic scenario, the austerity measures being imposed on Athens risk a recession so deep that Greece will not be able to climb out of the debt hole over the course of a new three-year, €170bn bail-out. (I think they meant to say $170bn there)

• US existing home sales +4.3% in Jan to 4.57 mln, below market expectations of 4.650 mln.
• Eurozone Markit composite PMI unexpectedly dropped to 49.7 in Feb; services fell to 49.4, manufacturing rise to 49.0 was less than expected.
• Germany Markit PMI – Manufacturing – 50.1 in Feb, below market expectations of 51.3, vs 51.0 in Jan; services slips to 52.6, also below expectations.
• France Markit PMI – Manufacturing 50.2 in Feb, above market expectations of 49.1, vs 48.5 in Jan; services better at 50.3.
• Eurozone Industrial Orders (sa) 1.9% in Dec, above market expectations of 1.3%, vs -1.1% preliminary print.
• France CPI 2.3% y/y in Jan, below expectations of 2.6%, vs 2.5% in Dec.
• Italy CPI – NIC (including tobacco) – Final 3.2% y/y in Jan, in-line with expectations, vs 3.2% preliminary read.

22-Feb (NYMagazine) — The largest question looming over Barack Obama’s presidency is what would have happened if he tried to push for a larger economic stimulus at the outset. Could he have gotten it passed? Did he think his plan was truly big enough, or just the biggest one he could pass?

In answer to that question, Noam Scheiber has acquired a major piece of the puzzle. While reporting his new book, The Escape Artists, which chronicles the administration’s response to the crisis, he got his hands on the fabled original version of Obama’s economic team’s 2008 memo, sort of the economic policy equivalent of the Blade Runner original cut. In the first version, Romer argues that a $1.8 trillion stimulus would be needed to fill in the anticipated output gap (which, in any case, turned out to be larger than anybody knew at the time.) But Larry Summers considered that figure unrealistically high — they would be laughed at by the political team — so the memo that reached Obama’s desk described an $850 billion stimulus as the largest possible option.

[source]

22-Feb (Dow Jones) — Platinum futures marched higher Wednesday on continued supply disruptions in main producer South Africa, while gold edged lower as elation over the Greek bailout cooled.

The most actively traded platinum contract, for April delivery, was recently $29.70, or 1.8%, higher, at $1,714.60 a troy ounce on the New York Mercantile Exchange.

Platinum prices have swelled due to supply disruptions at Impala Platinum Holdings, the world’s second-largest producer of the metal. An ongoing labor dispute at Rustenburg, the company’s largest mine, has already resulted in two deaths and accounted for the loss of about 80,000 troy ounces of platinum output.

The production disruptions come as many South African platinum producers continue to struggle with a shortage of electrical power, which also curtails operations. South Africa is the world’s largest producer of the metal as a nation, which is most widely used in automotive catalysts.

“As long as there are labor issues [in South Africa] and as long as they have continuing power concerns, it’s going to be very bullish for platinum and, to a lesser extent, palladium,” said Graham Leighton, director of precious metals trading at Newedge.

[source]

PG View: Gold has actually recouped overseas losses and is now steady on the day.

22-Feb (Reuters) — Fitch cut Greece’s long-term ratings on Wednesday to its lowest rating above a default, becoming the first ratings agency to make the widely expected downgrade after the country announced a bond exchange plan to ease its massive debt burden.

It said Greece would be designated as having technically defaulted after the bond exchange is formalized, but the new bonds would be given a new rating.

All three big ratings agencies — Fitch, Moody’s and Standard & Poor’s — downgraded Greece in July when an initial debt swap plan was unveiled and have warned that losses for private creditors would trigger a temporary default.

[source]

22-Feb (EconMatters) — In an article titled “Still No End to ‘Too Big to Fail,’” William Greider wrote in The Nation on February 15th:

Financial market cynics have assumed all along that Dodd-Frank did not end “too big to fail” but instead created a charmed circle of protected banks labeled “systemically important” that will not be allowed to fail, no matter how badly they behave.

That may be, but there is one bit of bad behavior that Uncle Sam himself does not have the funds to underwrite: the $32 trillion market in credit default swaps (CDS). Thirty-two trillion dollars is more than twice the U.S. GDP and more than twice the national debt.

CDS are a form of derivative taken out by investors as insurance against default. According to the Comptroller of the Currency, nearly 95% of the banking industry’s total exposure to derivatives contracts is held by the nation’s five largest banks: JPMorgan Chase, Citigroup, Bank of America, HSBC, and Goldman Sachs. The CDS market is unregulated, and there is no requirement that the “insurer” actually have the funds to pay up. CDS are more like bets, and a massive loss at the casino could bring the house down.

[source]

22-Feb (Dow Jones) — European stocks fell Wednesday as investors continued to dissect the new bailout deal for Greece and after mixed business activity data, although there were a few bright spots on the corporate front.

At 1035 GMT, the benchmark Stoxx Europe 600 index was down 0.6% at 265.27. London’s FTSE 100 index was down 0.3% at 5909.68, Paris’s CAC 40 was 0.3% lower at 3455.03 and Frankfurt’s DAX was down 0.7% at 6856.55.

Although Greece has, in principle, secured a second bailout deal, questions remain on its implementation and effectiveness.

The next step is to see how willingly private sector creditors will participate in the deal. The Institute of International Finance has negotiated a deal on behalf of private holders of Greek debt that will see a 53.5% reduction in the nominal value of their holdings. IIF Managing Director Charles Dallara said on Tuesday it is up to individual investors to decide whether or not to accept the deal, although he expects a big take up.

…Contagion risks are also a worry. Indeed, Portugal’s 10-year government bond yield didn’t paint a pretty picture. At 1040 GMT, Portugal’s 10-year government bond yield was up 8.20 basis points at 12.038%, according to Tradeweb.

[source]

By James Rickards
21-Feb (USNews) — Better late than never, some honesty has crept into the debate on Federal Reserve interest rate policy. Unfortunately the honesty consists of a candid warning by the Fed that savers will be victimized for the greater good of propping up asset values in housing and the stock market. The victimization takes the form of targeted inflation engineered by the Fed through zero interest rates and money printing. This is needed to bail out the banks, brokers, and builders who bet wildly and now need a more or less permanent rescue.

To understand why, begin with a world plagued with massive unpayable debt at the individual, corporate, and government levels. There are only three solutions to this much debt—default, inflation, and growth.

…For large sovereign debtors, the preferred solution is inflation.

…The Fed is doing everything possible to promote this inflationary outcome including holding rates artificially low, printing money, buying up bonds, and cheapening the dollar in foreign exchange markets. Of course, the Chinese will not be the only victims of this policy. Anyone relying on a stable dollar will suffer also. This includes savers, pensioners, and those holding insurance policies and annuities among others.

[source]

21-Feb (Reuters) — The European Central Bank wants its second offer of cheap ultra-long funds next week to be its last, putting the onus back on governments to secure the euro zone’s longer-term future.

Powerful members of the central bank’s 23-man governing council are privately hoping demand at the February 29 auction will fall well short of the 1 trillion euros some expect, backing their view that it should be the last.

Central bank sources say they are worried that banks will become too reliant on ECB funds, removing the incentive to restart lending between themselves.

[source]

PG View: Seems like indicating the 29-Feb LTRO may be the last is just the kind of thing that might prompt an aggressive uptake. Plus, despite what the ECB wishes, the banks and markets are already addicted to cheap and unlimited liquidity. If the ECB cuts them off, either the markets will correct, or some other central bank is going to have to pick-up the slack. Hello Fed?

21-Feb (ZeroHedge) — Wondering why the DJIA just passed 13K again? Wonder no more: as the chart below shows it is entirely due to the nearly $7 trillion pumped by global central banks into the world stock markets just in the past 4 years. As Sean Corrigan from Diapason notes, the aggregate global central bank balance sheet has doubled in four years, after doubling in the 5 years before that. We would add that with the entire centrally planned ponzi scheme hell bent on preserving the illusion of nominal gains, global liquidity is now fungibly sloshing from one market to another with absolutely zero resistance whatsoever. At this rate, it should double again in 3 years, then 2, and so on. Will the Dow hit 52K in 5 years in that case? Why most certainly. Just ask any remaining citizens of the Weimar Republic. They know all too well about exponential stock market rises. They also know absolutely everything about the self-delusion that comes with chasing NOMINAL numbers. Oh, and before we forget, expressed in spot gold price, the central bank aggregate tally has moved from being the equivalent of 10 billion oz of gold, to just 8 billion. Guess what is 20% underpriced.

[source]

21-Feb (Financial Times) — A “strictly confidential” report on Greece’s debt projections prepared for eurozone finance ministers reveals Athens’ rescue programme is way off track and suggests the Greek government may need another bail-out once a second rescue – set to be agreed on Monday night – runs out.

The 10-page debt sustainability analysis, distributed to eurozone officials last week but obtained by the Financial Times on Monday night, found that even under the most optimistic scenario, the austerity measures being imposed on Athens risk a recession so deep that Greece will not be able to climb out of the debt hole over the course of a new three-year, €170bn bail-out.

[source]

PG View: Looks like they’re queuing up bailout-3 even before bailout-2 has been finalized.

21-Feb (USAGOLD) — Eurozone finance ministers have agreed (once again) to a deal that will free-up the €130 bln second Greek bailout. The euro firmed, but was unable to recapture the 1.33 handle, leaving last week’s high intact. Markets seem generally nonplussed, as investors have seen this Greek ‘song and dance’ before…

The deal reportedly hinges on private bondholders “volunteering” for a larger haircut than the one they agreed to back in October. German Finance Minister Schäuble went as far to say that “all is still pending” on how the private sector reacts to this change in terms. Additionally, EU chief Junker and Christine Lagarde of the IMF pointed out that Greece still had to contend with some “prior actions” by the end of the month before the deal is really a done-deal.

Implementation risks abound and there are still understandable concerns that if a new Greek government comes to power in April, they wont honor the commitments of the current government. If that happen, this whole farce could begin anew.

While gold is rising, a retreat in European stocks and a softer tone on Wall Street suggest it’s not because of an improvement in risk appetite. Rather a ‘sell the fact’ theme seems to be dominating, and yet there doesn’t really seem to be any “fact” yet at all. The high in gold from 2-weeks ago at 1751.63 has been breached, but the more important level to watch is the late-January high at 1763.15.

• Canada retail sales -0.2% in Dec, below market expectations of -0.1%; ex-autos flat.
• Canada wholesale trade +0.9% in Dec, above market expectations of +0.5%, vs -0.3% in Nov.
• Switzerland trade balance slips in Jan to CHF1.6 bln, below expectations of CHF2.6 bln, vs CHF2.0 bln in Dec.
• Eurozone Flash Consumer Confidence ticked higher in Feb to -20.2, in-line with expectations, vs -20.7 in Jan.
• Japan All-Industry Index (sa) +1.3% m/m in Dec, vs -1.1% in Nov.
• Hong Kong unemployment rate (sa) ticks lower to 3.2% in Jan.
• Taiwan export orders -8.6% y/y in Jan, vs -0.7% y/y in Dec.
• Taiwan current account $12.10 bln in Q4, vs $10.19 bln in Q3.

21-Feb (Financial Times) — Eurozone finance ministers reached a long-delayed €130bn second bail-out for Greece early on Tuesday after strong-arming private holders of Greek bonds to take even deeper losses than they had accepted last month.

Although Greek bondholders agreed in October to accept a 50 per cent cut in the face value of their bonds in face-to-face negotiations with Nicolas Sarkozy, France’s president, and German chancellor Angela Merkel, they will now be offered a “voluntary” deal with a haircut of 53.5 per cent, eurozone officials said.

…Both Jean-Claude Juncker, chairman of the eurogroup of finance ministers, and Christine Lagarde, managing director of the International Monetary Fund, stressed that Greece still had to live up to a series of “prior actions” by the end of the month before eurozone governments or the IMF can sign off on the new programme.

In addition, the bail-out comes with tough new terms, including a permanent team of monitors in Greece to ensure Athens lives up to the terms of the bail-out deal and an escrow account which Greece will ensure always holds three months worth of debt payments. The escrow account will be temporary, however, and Athens has agreed to change its constitution to make debt repayment the top priority in government spending.

[source]

21-Feb (The Wall Street Journal) — Euro-zone finance ministers early Tuesday agreed to an ambitious €130 billion ($172.1 billion) rescue deal that will see Greece’s private creditors take an even larger loss in order to put the debt-laden country on a sustainable footing and avert a catastrophic default.

The agreement revolves around a debt exchange that calls for private investors to waive 53.5% of their principal under a massive debt swap that will cut Greece’s outstanding debt stock by €107 billion. That goes beyond a 50% haircut agreed upon at a summit in October.

Speaking after the conclusion of more than 12 hours of negotiations, Eurogroup chairman Jean-Claude Juncker said the agreement “provides a comprehensive blueprint for putting the public finances and the economy of Greece back on a sustainable footing, and hence for safeguarding financial stability in the euro zone.”

The deeper private sector haircut will help bring Greece’s debt as a proportion of gross domestic product to 120.5% by 2020 from over 164% currently.

…”All is still pending what the reaction of the private sector” will be, German Finance Minister Wolfgang Schäuble said.

[source]

PG View: The market is nonplussed. Perhaps because investors have heard this song before; and as the German FinMin said, “all is still pending.”

18-Feb (The Guardian) — Officials in key parts of the Obama administration are increasingly convinced that sanctions will not deter Tehran from pursuing its nuclear programme, and believe that the US will be left with no option but to launch an attack on Iran or watch Israel do so.

The president has made clear in public, and in private to Israel, that he is determined to give sufficient time for recent measures, such as the financial blockade and the looming European oil embargo, to bite deeper into Iran’s already battered economy before retreating from its principal strategy to pressure Tehran.

But there is a strong current of opinion within the administration – including in the Pentagon and the state department – that believes sanctions are doomed to fail, and that their principal use now is in delaying Israeli military action, as well as reassuring Europe that an attack will only come after other means have been tested.

[source]

20-Feb (Washington Post) — Eurozone governments are due to sign off on Monday a long-awaited rescue package for Greece, saving it from a potentially calamitous bankruptcy next month, senior officials said.

But finance ministers meeting in Brussels still have a few last issues to wrangle over, such as tighter controls over Greece’s spending and further cuts to the country’s debt load.

Greece needs to secure the €130 billion ($170 billion) bailout quickly so it can move ahead with a related €100 billion ($130 billion) debt relief deal with private investors, which needs to be in place quickly if Athens is to avoid a disorderly default on a bond repayment on March 20.

“I am of the opinion that today we have to deliver, because we don’t have any more time,” Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the meetings of eurozone finance ministers, said as he arrived in Brussels

[source]

PG View: According to the Dow Jones newswire, the Austrian FinMin has said that private bondholders may have to offer a bit more. Yeah, this is far from over…

BoJ Jumps on the Inflation Targeting Bandwagon

17-Feb (USAGOLD) — This week there was trumpeting from some quarters of the news that the Bank of Japan (BoJ) had finally decided to target inflation, albeit at a modest 1%. Those doing the trumpeting expressed some optimism that other central bankers would take note and follow-suit in the hopes that some level of inflation will spur languishing economies. For good measure, the BoJ raised its asset purchase target from ¥55 trillion to ¥65 trillion, saying that the additional ¥10 trillion would be dedicated to longer-term government bond purchases.

However, the notion that higher inflation will underpin an economy is misplaced in my opinion. An expanding economy will likely beget some level of inflation, but manufacturing inflation via expansionary monetary policy does not result in a corresponding rise in GDP (and employment).

I would argue the whole purpose of ZIRP, QE and inflation targeting is to disincentivize saving; to make people believe they must spend today for fear that what they need/desire will be more expensive tomorrow. However, in times of economic uncertainty, which is driving broad-based deleveraging, moderate price inflation is unlikely to be sufficient to dislodge the yen, dollars, euros and pounds from the increasingly tight grasps of consumers. As I suggested in a recent newsletter article after the Fed announced it would embark on inflation targeting, what we really end up with is an all-out attack on savers.

I certainly understand why central banks view deflation as the far greater evil, and therefore feel compelled to create inflation: Deflation is bad for the private banking industry served by the central banks. In deflationary times, consumers tend to forestall purchases in anticipation of lower prices, which in turn reduces the need for credit and therefore bank earnings.

From a consumer’s perspective one might argue that deflation stemming from a moribund economy is beneficial, as falling prices make it easier to maintain a standard of living. Those from the Austrian school of economics would say that market forces are simply bringing the prices of goods and services back inline with wages. Although maintaining a standard of living can become very difficult if the aforementioned delayed consumption costs you your job.

In fact, those that suffer the most from inflation-inducing policies — and the resulting decline in real wages — tend to be from the lower quintiles of the socioeconomic strata; those on fixed incomes or living paycheck-to-paycheck. This is especially true when inflation targeted at core-components — as the Fed is now doing — inevitably splashes over into food and energy, where those lower quintiles spend a relatively large percentage of their income compared to the upper-quintiles.

Additionally, those in the higher quintiles generally have the means to hedge the manufactured price risk (especially when it is telegraphed as “policy”) and may actually realize outsized returns if über-easy central bank policies result in an overshoot of the inflation targets, as we saw in the UK in recent years and Europe in 2011.

Actually, the UK is a pretty good example of what I’m suggesting: At the end of Q3-11, inflation was running at more than 5% (150% above target), while GDP was an anemic 0.5%.

Preliminary data suggest UK GDP weakened in Q4 to -0.2%. While inflation had moderated to 4.2% by year-end, I believe that is a result of a weaker economy. Not the other way around.

Nonetheless, the BoE reacted by increasing their asset purchase target by £50 bln to £325 bln. With the BoJ following their lead this week and the ECB hamstrung by the pesky realities of their charter, perhaps it is indeed the Fed’s turn to step back up to the plate…

That’s not going to get me to consume more, but it will likely prompt me to increase the hedges that I already have in place. And I don’t think I’ll be alone.

What’s the classic hedge against inflation? Gold of course…

17-Feb (Yahoo Finance) — As President Obama unveiled the 2013 fiscal year budget, the nation’s financial situation came back into sharp focus. Experts say partisan gridlock in Washington means the budget will probably go nowhere.

Considering this is an election year, however, expect politicians to harp on facts, figures and terms that most Americans weren’t taught in high school. To help out, it’s time to dredge up lots of scary facts to make you pay attention.

[source]

by Nouriel Roubini
17-Feb (Project Syndicate) — Since late last year, a series of positive developments has boosted investor confidence and led to a sharp rally in risky assets, starting with global equities and commodities. Macroeconomic data from the United States improved; blue-chip companies in advanced economies remained highly profitable; China and emerging markets slowed only moderately; and the risk of a disorderly default and/or exit by some members of the eurozone declined.

Moreover, under its new president, Mario Draghi, the European Central Bank appears willing to do anything necessary to reduce stress on the eurozone’s banking system and governments, as well as to lower interest rates. Central banks in both advanced and emerging economies have provided massive injections of liquidity. Volatility is down, confidence is up, and risk aversion is much lower – for now.

But at least four downside risks are likely to materialize this year, undermining global growth and eventually negatively affecting investor confidence and market valuations of risky assets.

[source]

17-Feb (Dow Jones) — Greece’s debt rating could fall into default in the coming days if past comments by ratings firms are any indication after the country completed a debt exchange on bonds held by the European Central Bank.

All three major ratings firms in recent months have said that a bond exchange where Greece replaces current outstanding bonds with new bonds that include worse terms for the bond holders would constitute a default.

Depending on the details of the debt swap the ECB just completed, that could be enough to trigger a ratings default in the eyes of the ratings companies.

[source]

PG View: I think the Greek bond market has already provided the answer to that question: Greek 1 Year At 629%, Biggest One Day Jump In Yield Ever.

By Mary Anne & Pamela Aden
17-Feb (MarketWatch) — U.S. stocks and gold are leading the way. In fact, these are our top picks for the months ahead and they’re looking good. Here’s why …

— Gold has been a consistent winner year after year. The technicals are bullish and so are the fundamentals. Gold’s bull market rise will remain intact by staying above $1560.

Due to monetary uncertainties and massive debt, central banks are big gold buyers. And so is the public, especially in China, India and other emerging nations. This is keeping demand strong.

Ongoing government spending, monetization, low interest rates in the Western world and weak currencies are also putting upward pressure on gold and silver.

[source]

17-Feb (Financial Times) — The US Congress on Friday passed a bipartisan $150bn bill to extend the payroll tax cuts and unemployment benefits until the end of the year, in a boost for struggling Americans and President Barack Obama’s re-election campaign alike.

In a rare show of cross-party agreement, both Republican and Democratic leaders hailed the passage of the in favour of the bill, which they said offered relief to 160m workers struggling to make ends meet and several million more who are looking for jobs.

…According to the Congressional Budget Office, the agreement will increase the federal deficit by $89bn over the next decade, mostly because of lower tax revenue.

[source]

16-Feb (Financial Times) — The World Gold Council believes China’s central bank made significant gold purchases in the final months of 2011, contributing to a surge in the country’s imports.

Marcus Grubb, managing director for investment at the WGC, a lobby group for the gold mining industry, told the Financial Times that buying by the People’s Bank of China could explain a large discrepancy between Chinese imports and the WGC’s estimates of consumer demand in the country.

“There is absolutely a discrepancy in the import figures,” said Marcus Grubb. “The obvious inference is that the central bank is buying.”

[source]

17-Feb (Bloomberg) — Italian anti-mafia prosecutors said they seized a record $6 trillion of allegedly fake U.S. Treasury bonds, an amount that’s almost half of the U.S.’s public debt.

The bonds were found hidden in makeshift compartments of three safety deposit boxes in Zurich, the prosecutors from the southern city of Potenza said in an e-mailed statement. The Italian authorities arrested eight people in connection with the probe, dubbed “Operation Vulcanica,” the prosecutors said.

[source]

PG View: Counterfeiting is an aspect of the “paper market” that is not considered much these days. But that is a huge amount of Treasuries!

17-Feb (USAGOLD) — Gold remains fairly well contained, within the confines of the range established earlier in the week. Tests of the upside have proven unsuccessful, leaving resistance marked by Wednesday’s high at 1736.70 intact.

While no decision on Greece is expected until Monday, the euro is clinging to gains from yesterday’s sharp rebound. But let’s be honest, after months delays, promises and outright lies, what do you suppose the odds are that the Greek ‘can’ truly is kicked again come Monday?

The ECB is reportedly ready to swap the €50 bln in Greek bonds it’s holding on its balance sheet — and may have already done so. While private bondholders are allegedly volunteering to take a 70% (or more) haircut on the Greek bonds they hold, not so for the ECB it would seem.

Yesterday’s release of The World Gold Council’s Gold Demand Trends report confirmed that demand for the yellow metal remained robust in 2011. Global demand exceeded the $200 bln mark for the first time ever and demand in tonnage reached the highest level since 1997, when the gold market was moving into the range that would ultimately prove to be a long-term base. Gold is up nearly 600% from the lows established in the late-90s/early-00s.

Investment demand was up 5% in 2011. And while unsurprisingly, China and India remain primary sources of demand, there was a strong surge in European demand as “the eurozone remains in turmoil and the need for asset protection continues to be a priority.”

Marcus Grubb, Managing Director, Investment at the World Gold Council summed the data up nicely by saying, “What is certain is that the long-term fundamentals for gold remain strong, with a diverse and growing demand base, coupled with constrained supply side activity.” And as any first year economics student can tell you, growing demand and contracting supply is a recipe for higher prices.

• US leading indicators +0.4% in Jan, below market expectations of +0.5%, vs positive revised +0.5% in Dec.
• US CPI +0.2% in Jan, below market expectations of +0.3%; core +0.2%, in-line with expectations.
• Canada leading indicator +0.7% in Jan, a tick above expectations, vs +0.7% in Dec.
• Canada CPI +2.5% y/y in Jan, above expectations of +2.3%; core +2.1%, near median.
• Germany CPI +0.6% in Jan, above market expectations of 0.4%, vs -0.4% in Dec; 3.4% y/y.
• Eurozone current account (sa) €2.0 bln in Dec, vs -€0.9 bln; €16.3 bln (nsa).
• UK retail sales +0.9% m/m in Jan, well above market expectations of -0.1%, vs 0.6% in Dec; 2.0% y/y, down from 2.6% in Dec.