The ECB today is likely to leave the refinancing rate unchanged at 1%. In the press conference, President Trichet is expected to repeat the view of the Governing Council that the economic recovery path going forward will be 'uneven'. Indeed, Germany yesterday said that fullyear 2009 GDP fell 5% and that quarter-on-quarter growth was flat in the final quarter, after rises in the prior two quarters. To date, the ECB has been at pains to stress that the measures taken to start unwinding its 'unconventional' policy measures do not represent an attempt to influence money market rates such as EONIA (which would send a message of imminent tightening to financial markets). There will also be considerable interest on any comments relating to Greece's financial predicaments. The are no major economic data or events in the UK today. Yesterday, November industrial production numbers reaffirmed the likelihood of a return to growth in Q4, with the National Institute for Economic and Social Research estimating that quarter-on-quarter GDP rose 0.3%. We think it could be stronger. In the US, December retail sales and import prices are among the main data releases, while the Treasury will offer $13bn of 30-year bonds. We forecast monthly retail sales to rise 0.6% (5.3% on the year), but a downside risk could be the adverse weather conditions, which may have played a part in the December nonfarm payrolls figures
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