US inflation figures will headline the data docket this week, though there is no shortage of developments to occupy traders over the coming days. In Europe, the European Central Bank is scheduled to publish its Economic Bulletin on Thursday.

    
Away from the data, SocGen cautioned that French politics could generate renewed noise. The bank noted that a vote of no confidence—called by both the far left and far right following the signing of the EU–Mercosur trade deal—is expected to take place early in the week. While analysts said it appears highly unlikely that the government would fall on this issue, they added that, with farmers’ protests intensifying pressure on lawmakers, the risk cannot be entirely ruled out. 

    
In Germany, analysts observed that France’s government has officially resumed negotiations on its 2026 budget under a special “bridge law”. Deutsche Bank said formal parliamentary debate is due to begin on 13 January, with the government aiming to secure passage by the end of the month. The process will involve three votes on the budget bill. (LS – Continue Reading) 

The US attorney’s office in the District of Columbia has opened a criminal investigation into Jerome H. Powell, the Federal Reserve chair, over the central bank’s renovation of its Washington headquarters and whether Mr. Powell lied to Congress about the scope of the project, according to officials briefed on the situation. 

The inquiry, which includes an analysis of Mr. Powell’s public statements and an examination of spending records, was approved in November by Jeanine Pirro, a longtime ally of President Trump who was appointed to run the office last year, the officials said. 

The investigation represents the opening of a major new legal front against Mr. Powell, whom Mr. Trump has continually attacked for resisting his demands to slash interest rates significantly. The president has threatened to fire the Fed chair — even though he nominated Mr. Powell for the position in 2017 — and raised the prospect of a lawsuit against him related to the $2.5 billion renovation, citing “incompetence.” (NYT – Continue Reading) 

UK employers cut back their hiring again in December, according to a closely watched survey that is likely to add to the Bank of England’s concerns about a weakening jobs market. 

The Recruitment & Employment Confederation and KPMG said permanent staff placements fell at the steepest rate since August, as businesses grappled with rising costs and weak sentiment in the wake of Labour’s tax-raising budget on Nov. 26. Hiring for temporary roles also fell, albeit at a milder rate. (BBG – Continue Reading)