What are the main events for today?

Overview of the European Session

In today's European session, the final Eurozone CPI report is set to be released, but no significant market reaction is expected. The market pays more attention to the Flash report, and deviations from preliminary numbers are typically rare, suggesting muted reactions. Focus is heavily on Trump's trade war related to Greenland, imposing a 10% tariff on countries including the UK, France, and Germany starting February 1, rising to 25% by June 1. This has intensified risk aversion, likely persisting for the next few days.

Outlook for the American Session

In the American session, the Canadian CPI report will be the main highlight. The Bank of Canada (BoC) focuses on underlying inflation, with the Trimmed Mean CPI expected at 2.7%, slightly lower than the previous 2.8%. Recent weaker data has reduced rate hike expectations, now pricing in only 11 basis points of tightening by year-end.

Conclusion

Additionally, today marks a US holiday with stock and bond markets closed. Market movements today will heavily depend on the trade war developments and responses from businesses and investors. As leaders gather in Davos for the World Economic Forum, some clear momentum may arise later this week.