• Extending article 50 would not solve legal problems of ratifying withdrawal

• UK and EU agree on need to have strict time limit for implementation period

• UK and EU must follow same rules for implementation period to work

• We agree on need for continued access to each others markets on current terms

The Consumer Price Index (CPI) increased 1.9% on a year-over-year basis in December, following a 2.1% gain in November. The all-items excluding gasoline index rose 1.5% year over year in December, matching the increase in November.

Prices were up in seven of the eight major CPI components in the 12 months to December, with the transportation and shelter indexes contributing the most to the increase. The household operations, furnishings and equipment index declined 0.3% on a year-over-year basis.

Consumer prices for transportation rose 4.9% on a year-over-year basis in December, following a 5.9% increase in November. The movement in transportation prices was led by gasoline, which rose 12.2% year over year in December, after increasing 19.6% the previous month. The purchase of passenger vehicles index increased 3.7% in the 12-month period ending in December.

New orders for manufactured durable goods in December increased $7.0 billion or 2.9 percent to $249.4 billion, the U.S. Census Bureau announced today. This increase, up four of the last five months, followed a 1.7 percent November increase. Excluding transportation, new orders increased 0.6 percent. Excluding defense, new orders increased 2.2 percent. Transportation equipment, also up four of the last five months, led the increase, $6.0 billion or 7.4 percent to $87.2 billion.

Shipments of manufactured durable goods in December, up seven of the last eight months, increased $1.5 billion or 0.6 percent to $246.8 billion. This followed a 1.3 percent November increase. Fabricated metal products, also up seven of the last eight months, led the increase, $0.5 billion or 1.5 percent to $33.5 billion.

Real gross domestic product (GDP) increased at an annual rate of 2.6 percent in the fourth quarter of 2017, according to the "advance" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.2 percent.

The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, residential fixed investment, state and local government spending, and federal government spending that were partly offset by a negative contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased

The price index for gross domestic purchases increased 2.5 percent in the fourth quarter, compared with an increase of 1.7 percent in the third quarter The PCE price index increased 2.8 percent, compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index increased 1.9 percent, compared with an increase of 1.3 percent

• Says reent statements about currencies have not been helpful

• We will have to reassess if currency levels continue to shift

• Whatever happens to the dollar remains very important

UK gross domestic product (GDP) was estimated to have increased by 0.5% in Quarter 4 (Oct to Dec) 2017, compared with 0.4% in Quarter 3 (July to Sept) 2017.

The dominant services sector, driven by business services and finance, increased by 0.6% compared with the previous quarter, although the longer-term trend continues to show a weakening in services growth.

Production industries grew by 0.6%, boosted by the second consecutive quarter of strong growth in manufacturing.

Growth in manufacturing was partially offset in total production by a significant fall in oil and gas extraction, caused by the well-publicised repair work made to the Forties pipeline.

• 2018 gdp growth forecast raised to 2.3 pct vs 1.9 pct

• 2019 gdp growth forecast raised to 1.9 pct from 1.7 pct

• 2019 inflation at 1.7 pct vs 1.6 pct 3 months ago

• 2022 inflation forecast steady at 1.9 pct; initial 2020 estimate at 1.8 pct

• The annual growth rate of the broad monetary aggregate M3 decreased to 4.6% in December 2017, from 4.9% in November.

• The annual growth rate of the narrower aggregate M1, which includes currency in circulation and overnight deposits, decreased to 8.6% in December, from 9.1% in November.

• The annual growth rate of adjusted loans to households stood at 2.8% in December, unchanged from the previous month.

• The annual growth rate of adjusted loans to non-financial corporations decreased to 2.9% in December, from 3.1% in November.

• Tells Reuters that Paris could overtake London as Europe's top financial centre within years

EUR/USD

Resistance levels (open interest**, contracts)

$1.2559 (2818)

$1.2529 (1094)

$1.2504 (2284)

Price at time of writing this review: $1.2453

Support levels (open interest**, contracts):

$1.2369 (385)

$1.2349 (554)

$1.2324 (569)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date February, 9 is 130495 contracts (according to data from January, 25) with the maximum number of contracts with strike price $1,1850 (7037);

GBP/USD

Resistance levels (open interest**, contracts)

$1.4359 (243)

$1.4325 (242)

$1.4293 (1137)

Price at time of writing this review: $1.4245

Support levels (open interest**, contracts):

$1.4105 (114)

$1.4071 (149)

$1.4034 (333)

Comments:

- Overall open interest on the CALL options with the expiration date February, 9 is 43676 contracts, with the maximum number of contracts with strike price $1,3600 (3468);

- Overall open interest on the PUT options with the expiration date February, 9 is 38543 contracts, with the maximum number of contracts with strike price $1,3400 (3043);

- The ratio of PUT/CALL was 0.88 versus 0.84 from the previous trading day according to data from January, 25

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

• We still need accommodative monetary policy

• Says UK is a bit of an outlier, we do see a bit of a pick-up in growth

• World economy is accelerating, UK has not seen this yet

• There is a prospect that UK will be recoupled with global growth later this year

• UK economic output likely to be tens of billions of pounds lower by the end of this year than if it hadn't voted for brexit

(pare/closed(GMT +2)/change, %)

EUR/USD $1,2397 -0,08%

GBP/USD $1,4139 -0,67%

USD/CHF Chf0,941 -0,47%

USD/JPY Y109,40 +0,18%

EUR/JPY Y135,62 +0,09%

GBP/JPY Y154,678 -0,50%

AUD/USD $0,8024 -0,51%

NZD/USD $0,7322 -0,21%

USD/CAD C$1,23717 +0,23%

07:45 France Consumer confidence January 105 106

09:00 Eurozone Private Loans, Y/Y December 2.8% 2.9%

09:00 Eurozone M3 money supply, adjusted y/y December 4.9% 4.9%

09:30 United Kingdom GDP, q/q (Preliminary) Quarter IV 0.4% 0.4%

09:30 United Kingdom GDP, y/y (Preliminary) Quarter IV 1.7% 1.4%

10:00 Eurozone ECB's Benoit Coeure Speaks

13:00 U.S. FOMC Member James Bullard Speaks

13:30 Canada Consumer Price Index m / m December 0.3% -0.3%

13:30 Canada Bank of Canada Consumer Price 1.3% 1.5%

13:30 Canada Consumer price index, y/y December 2.1% 1.9%

13:30 U.S. Goods Trade Balance, $ bln. December -69.68 -68.6

13:30 U.S. Durable goods orders ex defense December 1% 0.3%

13:30 U.S. Durable Goods Orders ex Transportation December -0.1% 0.5%

13:30 U.S. Durable Goods Orders December 1.3% 0.8%

13:30 U.S. PCE price index ex food, energy, q/q (Preliminary) Quarter IV 1.3% 1.6%

13:30 U.S. PCE price index, q/q (Preliminary) Quarter IV 1.5% 1.8%

13:30 U.S. GDP, q/q (Preliminary) Quarter IV 3.2% 3%

14:00 United Kingdom BOE Gov Mark Carney Speaks

14:00 Japan BOJ Governor Haruhiko Kuroda Speaks

18:00 U.S. Baker Hughes Oil Rig Count January 747