Euro area central bankers are widely expected to hold interest rates at current levels Thursday as officials continue to feel at home in the public lender’s “good place”.

Analysts said the European Central Bank looks unlikely to make any moves anytime soon, or this year for that matter, with the wide majority of economists suggesting the first shift in interest rates will come in 2027.

Inflation continues to abate, with the annual headline rate dropping to 1.7% last month, according to preliminary data from the EU statistics office. This was the lowest mark since September 2024, pushing it well below the ECB target of 2% over the medium term. More importantly, the core rate (likely what the ECB is really watching) dropped unexpectedly to 2.2% last month, its weakest since October 2021. These declines could revive talks of rate reductions, some observers noted. (LiveSquawk – Continue Reading)

With little likelihood of a policy move from the Bank of England this week, investor attention will centre to the accompanying statement and updated economic forecasts.

The latest economist poll expects the Monetary Policy Committee to vote to keep the Base Rate unchanged at 3.75%, with the decision due at midday on Thursday.

How policymakers communicate their future intentions will be closely scrutinised. This may be reflected in the voting split, though analysts are divided on whether the outcome will be 6–3 or 7–2.

Morgan Stanley expects three dissenters – Swati Dhingra, Alan Taylor and Dave Ramsden – to vote for a 25bp cut. The bank said uncertainty around the meeting’s policy “lean” remains wide. “Our view is that the updated forecasts and limited near-term pricing of cuts will push Governor Andrew Bailey towards more labour-market-focused messaging,” analysts said. (LiveSquawk – Continue Reading)

The U.S. Treasury said on Wednesday it does not expect to lift auction sizes for notes and bonds for several more quarters, matching market expectations, as it outlined a $125 billion refunding for February to April 2026.

The package will raise new cash of $34.8 billion from private investors for the quarter.

Thomas Simons, chief U.S. economist at Jefferies, said in a research note that the main takeaway from the announcement was the Treasury's guidance that auction sizes will be maintained for the next several quarters, after hinting at possible changes in November. (Reuters – Continue Reading)

How is it possible that UK inflation – currently the highest in the G7 at 3.4% - can be below the 2% target as soon as April?

For one thing, it would be a significant undershoot of the Bank of England’s November forecasts, which had headline inflation averaging 2.9% through the second quarter.

Yet below target is exactly where we think we’re heading – even if only momentarily. We forecast inflation will drop to 1.8% in April before hovering at the 2% target through the spring and summer. What’s more, we think roughly 0.8 percentage points of the decline from December’s reading is virtually locked in – an artefact of regulated price changes and tax changes.

If we’re right, it’s another reason to think the Bank has more work to do on rate cuts. Remember, the Bank's hawks have been particularly sensitive to elevated rates of headline inflation and the risk that this could morph into a more persistent episode of price pressure. We expect cuts in March and June. (ING – Continue Reading)

It sure felt like Groundhog Day for crypto investors. Bitcoin, Ethereum, and the like plunged over the weekend, following cascading selling pressure across the precious metals space to close out January. So far in 2026, Bitcoin is down 11%, while Ether is off 23%.

Zoom out a year and the pair of digital assets has declined 20%, all while global equities have zoomed to record highs. Inflation has been well above the Fed’s 2% target, mind you. (StockCharts – Continue Reading)