FXStreet (Bali) - David Fritz, Global FX Strategist at Nomura, summarizes this week's key headline events, with the ECB / BOC policy meeting, and the US CPI, as the most relevant events coming up. Key Quotes "In the US, given the tightening in labor markets and low vacancy rate of rental houses, we continue to expect a gradual pick-up in core CPI in the medium term (+2.1% y-o-y gain in core CPI in December). In line with our forecast that energy prices declined in December and food prices were flat, we expect headline prices to fall by 0.01% m-o-m (+0.8% y-o-y)." "In terms of housing, unseasonably warm weather in November led to strong gains in permits for the month. We are probably unlikely to see another surge in building authorizations in permits in December, given that weather expectations were probably already baked into the permits data in November, and we expect permits to decline but remain elevated at 1200k in December." "Homesales fell sharply by over 10% in November, where the anomalous drop could be due to new regulations put in place in the fall, to which the industry is still adjusting." "The delay appears to be at closing stages and this likely means that any delayed closing due to the new regulations could show up in December. We forecast existing homesales rebounded by 9.2% in December. We see the tight supply of homes available for sale to constrain home sales to some extent in the near to medium term." "In Canada, we believe the Bank of Canada will cut its policy rate by 25bp to 0.25% at next week’s meeting. The second oil price shock that saw Brent, WTI and WCS all fall well below the Bank’s assumptions laid out in October is a sound reason for the BoC to protect against further downside risk." "We do not expect the ECB to make any changes to its monetary policy stance so soon after the 3 December easing. Despite the disappointment of the last meeting, the monetary policy Account does leave options open for more ECB easing, and there were no indications that -30bp represents any threshold for the deposit rate in the Governing Council’s thinking." "The possibility of expanding the monthly pace of purchases, frontloading purchases, and extending the APP beyond the suggested six months to March 2017 was also raised. The upcoming 21 January meeting will therefore be important for assessing the tolerance level within the Council to significant weakening in the short-term inflation outlook that is evolving, and the earliest point at which the ECB is willing to make a “reassessment” on further easing." "In addition to monetary policy divergence, we see international flows also having become more EUR negative in the medium term, and we expect fixed income outflows to remain strong in the euro area this year." "In the UK, we have inflation and the labor market report next week. We expect that problems in the steel industry to likely put upward pressure on jobless claims again in December and see CPI remain flat at 0.1% y-o-y on the back of a warmer winter placing downward pressure on average price, which is offsetting the base effects from petrol price falls that were even larger than those in our forecast for 2015." For more information, read our latest forex news.