Eurozone's CPI eased to 1.1% yoy in January, much lower than market expectation of 1.4% and 1.6% in December. This was also the lowest reading since Jul 1999. On the other hand, unemployment rate rose to 2-year high of 8% in December from a revised 7.9% in the previous month. Euro remains generally pressured, in particular against Sterling which is supported by unexpected rise in UK mortgage approvals from 27k to 31k. Markets' attention will turn to 4Q GDP from US in the US session.

US 4Q GDP will probably show an annualized decline of -5.4%, the worse since 1982. Consumer spending should have continued to plunge after turning negative for the first time in 3Q as driven by weak durables consumption as well as increasing unemployment. Residential investment, which has already dropped for 11 consecutive quarters, should remain the downtrend. The GDP price index is expected to slow to 0.4% qoq from 3.9% in Q3, suggesting nominal GDP will fall at an annualized rate of -5% over the quarter. The employment cost index is forecast to have risen 0.7% in 4Q, same as the last quarter. Chicago PMI probably has contracted to 34 in January, due mainly to factory closure in auto sector, from an upwardly revised 35.1 in December. Economists anticipated the University of Michigan will report final reading of 61.9 for consumer sentiment in January. However, downside risk is there as layoff announcements have increased and economic data have shown further weakness in global economy. Canada's GDP in December should have contracted -0.4% mom after declining by -0.1% in November.

Released in earlier today, Japan manufacturing PMI fell to 29.6, the lowest level since 2001 and the 11th consecutive month below 50, in January from 30.8 in December as the country's export was greatly affected by economic slowdown. January unemployment rate increased to 4.4%, above consensus of 4.2% and December's 3.9%. At the same time, household spending contracted -4.6% yoy, worse than market expectation of -3.8% decline and -0.5% drop in the previous month. Japan's national CPI rose 0.4% yoy in December following a 1% gain in November while core inflation adding 0.2% yoy, the lowest reading since October 2007, after a 1% annual increase in the previous month. As a leading indicated to the nationwide index, Tokyo core CPI in January eased to 0.5% after rising 0.8% in the previous month. Tokyo's overall inflation also came in at 0.5% yoy in December. Japan's industrial production slid severely by a record -9.6% mom in December, worse than consensus of -9% and -8.5% in November. On yearly basis, the gauge plunged -20.6% from -16.6% a month ago. Although better than consensus of -8%, Japan's housing starts plunged for the first time in 6 months by -5.8% in December. Construction orders also fell -27.3% in December after dropping -12.5% a month ago. UK Gfk consumer confidence dropped to -37 in January, the lowest in 6 month, after falling to -33 in December.

Economic Indicators Update