• ECB monthly bulletin: ECB sees inflation undershooting in 2009, 2010. Economy to remain weak. Editorial of bulletin closely mirrored Trichet statement last week.
• UK quarterly inflation expectations fell to 2.1% from 2.8% in November.
• UK construction orders down 12% in 3 months to January
• Euro zone industrial producer prices -0.8% m/m, -0.5% y/y (much weaker than median forecasts of -0.2 and +0.5% respectively
• German industrial output for January fell -7.5% m/m (much weaker than median forecast of -3.0%) New record post-reunification drop.
• Japanese yen strength still a main feature. JPY bolstered by repatriation flows. People are looking at weekly MOF flow data which suggests that fiscal year-end repatriation has begun already. Usually it occurs last two weeks of fiscal year. Talk of euro bond-related need to sell 9 yards of EUR/JPY over next 48 hours has also helped bolster yen. Talk Japanese lifers sold 10 yards of USD/JPY in recent sessions.