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·       The Bureau of Labor Statistics, a division of the Department of Labor will publish its Consumer Price index for January on Wednesday February 13th at 8:30 am EST, 13:30 GMT

Core CPI, which excludes food and energy costs, is expected to rise 0.2% in January as it did in December with the annual rate slipping to 2.1% from 2.2%.  Overall inflation is predicted to decline 0.1% in January the same as December with annual price changes dropping to 1.6% from 1.9% in December

·       U.S. President Donald Trump on Tuesday said he was not happy about a tentative immigration deal reached by a bipartisan group of lawmakers, but he did not anticipate another partial shutdown of the federal government.

“I don’t think you’re going to see another shutdown,” the Republican president told reporters at the White House.

Trump added that he did not want to see another shutdown following the 35-day closure that stretched from late December into late January, but that if there were one, it would be Democrats’ fault.

Congress and the White House face a Saturday deadline to avert another shutdown of about one-quarter of the U.S. government.

·       U.S. Treasury Secretary Steven Mnuchin said on Wednesday he hopes for “productive” trade meetings in China this week, as the two countries seek to hammer out an agreement amid a festering dispute that has seen both level tariffs at each other.

Mnuchin, asked by reporters as he left his Beijing hotel what his hopes were for the visit, said “productive meetings”. He did not elaborate.

·       The Federal Reserve will chart plans to stop letting its bond holdings roll off “at coming meetings,” Cleveland Fed President Loretta Mester said on Tuesday, signaling another major policy shift for the Fed after pausing interest rate hikes.

“At coming meetings, we will be finalizing our plans for ending the balance-sheet runoff and completing balance-sheet normalization,” Mester said in remarks prepared for delivery in Cincinnati. “As we have done throughout the process of normalization, we will make these plans and the rationale for them known to the public in a timely way because transparency and accountability are basic tenets of appropriate monetary policymaking

·       China will likely become more reliant on foreign capital as the country looks set to enter into years of shortfall in its current account, Morgan Stanley predicted in a report.

"The economy's current account is in long-term decline and the future growth of the economy will be increasingly dependent on foreign capital," said the investment bank in a report on Tuesday.

China's current account surplus has slipped from 10.3 percent of its GDP in the third quarter of 2017, to just 0.4 percent in the third quarter of 2018. This year, the current account deficit could be 0.3 percent of its GDP, and widen to 0.6 percent in 2020, the investment bank predicted.

The report blamed the shrinking current account on China's ageing population, and flattening market share in goods exports, among other factors. But there are opportunities for investors too, the bank said.

·       October is still an “opportune time” for Japan to raise its sales tax as risks posed by global trade tensions are likely to be temporary, an official at ratings agency Moody’s Investors Service said on Wednesday.

Christian de Guzman, a vice president of sovereign ratings, also said Japan’s growth outlook remains stable partly because it is supported by accommodative monetary policy.

The Bank of Japan can keep its accommodative policy in place for the time being, because the country’s financial sector is robust enough to withstand the current low-interest-rate environment, he told reporters.

Japan is scheduled to raise the tax to 10 percent from 8 percent in October.

 “This may still be the most opportune time to raise the consumption tax... given the background of relatively stable growth and political stability,” de Guzman said.

·       According to the latest Reuters poll of economists, the British economy is likely to see a modest upturn in growth should the UK clinch a free trade agreement with the European Union (EU).

Key Findings:

“A free-trade deal between the two will be made and expectations that Britain will leave on March 29 without an agreement have barely changed over the past month.

UK economy to grow 0.2 pct in Q1 2019; 0.3 pct in Q2; 0.4 pct in Q4 (0.3; 0.3; 0.4 In Jan Poll).

Bank of England (BOE) to raise bank rate to 1.00 Pct in Q4 2019 (Q3 2019 In Jan Poll).

EU-UK Free Trade Agreement is most likely eventual outcome of Brexit.

Chance of disorderly Brexit nudged up to 25 Pct (23 Pct in Jan Poll).”

·       As North Korea signals a willingness to open up its highly centralized, socialist economy, Vietnam's model of development is being widely suggested as a blueprint for Pyongyang to emulate.

·       Oil prices rose on Wednesday as producer club OPEC said it had cut supply deeply in January and as U.S. sanctions hit Venezuela's oil exports.

U.S. West Texas Intermediate (WTI) crude oil futures were at $53.70 per barrel at 0344 GMT, up 60 cents, or 1.1 percent, from their last close.

International Brent crude futures were up 1.1 percent, or 69 cents, at $63.11 per barrel.

Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore, said oil prices were boosted after "Saudi Arabia announced it was cutting daily production and exports by a further 500,000 barrels per day (bpd) on top of its agreed OPEC quota cut".

 

Reference: Reuters, CNBC, FXStreet, Daily FX