• EUR/USD dipped into multi-week lows after an unexpected uptick in US CPI inflation.
• European February ZEW Economic Sentiment Survey improved.
• European GDP growth, US Retail Sales in the pipe for the midweek.

EUR/USD tumbled 0.9% on Tuesday after US Consumer Price Index (CPI) inflation came in above market expectations. Money markets’ expectations of rate cuts from the Federal Reserve (Fed) got knocked back as US inflation proves stickier than investors were hoping for.

Europe saw a slight improvement in the ZEW Economic Sentiment Survey for February, and Euro (EUR) traders will be gearing up for European Gross Domestic Product (GDP) figures due on Wednesday. Thursday will follow up with more US economic data with US Retail Sales expected to slow in January.

Daily digest market movers: EUR/USD gets a sharp rebalance on safe-haven flows into US Dollar

• MoM US CPI inflation ticked up to 0.3% in January versus the forecast 0.2%.
• December’s monthly CPI saw a slight revision down from 0.3% to 0.2%.
• Core MoM CPI also ticked up to 0.4% from the forecast steady hold of 0.3%.
• Annualized headline CPI inflation printed at 3.1%, above the forecast 2.9% but still easing slightly from the previous period’s 3.4%.
• Money markets are now pricing in a first rate cut from the Fed in June or July after getting knocked off of a March rate trim bet.
• The euro area ZEW Economic Sentiment survey for February improved to 25.0 from the previous 22.7, reversing the forecast decline to 20.1.
• Wednesday’s European GDP is expected to hold flat at 0.0% for the fourth quarter.
• Annualized European quarterly GDP is forecast to hold steady at a scant 0.1%.
• European Central Bank (ECB) President Christine Lagarde makes an appearance early Thursday.
• ECB President Lagarde will be testifying before the European Parliament’s Committee on Economic and Monetary Affairs in Brussels.
• Thursday also sees US Retail Sales, and investors are hoping for January’s retail activity to tick down -0.1% versus the previous month’s 0.6%.