EUR/USD SENT ONTO THE BACKFOOT AS END OF MONTH FLOWS KICK-IN ON WALL STREET - ECB will be key

As for the ECB, markets have been starved of comments from ECB officials in recent times and there has not been much in the way of data to go by either,. Instead, the sentiment is for a 50 basis point hike followed by hawkish commentary from governor Christine Lagarde. '' There is room for things to get interesting during the press conference,'' analysts at TD Securities argued, adding ''and here we think Lagarde will sound more hawkish than expected and repeat her earlier guidance of possibly further 50bps hikes in March and May.''

Analysts at Danske Bank ultimately see the ECB's terminal rate at 3.25% in May but argued that risks remain tilted to the upside. They note also that the January Flash HICP figures will be released just ahead of the meeting on Wednesday. ''We look for an uptick both in the headline (9.6%; from 9.2%) and core (5.4%, from 5.2%) terms.''

The grand finale will come with the US Nonfarm Payrolls on Friday whereby the consensus sees 185k jobs added vs. 223k in December, as analysts at Brown Brothers Harriman said, explaining that the Unemployment Rate is seen up a tick to 3.6% and average hourly earnings at 4.3% YoY vs. 4.6% in December.  ''All in all, the labour market remains tight and it’s hard to see how wage pressures can fall that much further given this tightness,'' the analysts argued.