Following a quiet overnight session in which the main event appears to be a statement by Chinese premier Li for more active fiscal policy, which has pushed the metals complex higher, although technically every other asset class as well, with US equity futures set to open in fresh record high territory, even as 10Y yields around the world continue to decline, attention today will fall on the CPI print due out shortly, because if consensus is correct, January will be the first month this decade when US inflation posts a negative print, mostly due to the delayed effect of sliding commodity prices. As Deutsche recaps, the most important number today is the headline CPI where the headline YoY rate is predicted to be negative by the market (-0.1%) for the first time since 2009. Over this period the YoY rate stayed negative for 8 months. However before this we hadn't seen a full year decline since August 1955. So these continue to be unusual times and with very few predicting inflation successfully over the last few months or even years it is hard to say with certainty where the bottom will be and how steep a recovery we'll see. The Fed are amongst those who have not predicted inflation very well and the main issue with a rate rise this summer is that it appears based on faulty forecasts of a recovery in CPI-measured inflation. In other words, a few months before what may be the first US rate hike for a new generation of traders, the US is set to print its first annual deflation since Lehman, transitory or not. European equities trade in positive territory with today’s session being particularly light in terms of macro newsflow. Nonetheless, on a sector specific basis, energy names initially led the way higher for Europe after WTI crude futures managed to hold above USD 50bbl after breaking above the handle yesterday. However, heading into the North American crossover, basic material names jumped to the top of the pile as precious metals managed to extend on their recent gains. In fixed income markets, Bunds saw an early bout of strength as European equity futures came off their best levels, with the Mar’15 future printing a fresh contract high in the wake of yesterday’s substantial gains. Elsewhere, Portugal was the latest nation to see their 10yr yield break below 2% for the first time with Italian, Dutch and Irish 10yr paper already printing record lows this week. Nonetheless, volumes for the Bund remain relatively light with participants awaiting key tier 1 data release from the US at 1330GMT. Hang Seng (+0.5%) and Shanghai Comp (+2.1%) outperformed on speculation of further PBoC easing measures, after Chinese Premier Li called for more active economic policy. However, gains for the Hang Seng were trimmed after S&P lowered their 2015 Chinese GDP growth forecast to 6.9% from 7.1%. Nikkei 225 (+1.08%) posted fresh 15-yr highs underpinned by JPY weakness, of note S&P reduced Japan's 2015 GDP growth forecast to 0.7% from 1.3%. Overnight, AUD was dragged lower after Q4 Australian Capex data (Q/Q -2.2% vs. Exp. -1.6% (Prev. 0.2%) saw a 2nd consecutive decline. This prompted markets to push ahead expectations for a 25bps RBA rate cut next week, with odds now at 53% vs. 38% before today's data. Nonetheless, AUD was granted some reprieve heading into the European open following the upside in metals markets, this also benefited CAD with USD/CAD slipping below 1.2400. Elsewhere, NZD was able to hold onto its gains following its surprise trade surplus, while the fall in US yields saw USD/JPY break below its 50DMA seen at 118.79. In commodity markets, spot gold has risen throughout the session with the yellow metal breaking above its 100DMA at USD 1216.29/oz as USD continued to weaken in the wake of Fed Chair Yellen’s more dovish than expected 2-day testimony and calls by Chinese premier Li for more active fiscal policy. Subsequently copper traded higher overnight and is on track for its best month in nearly 2½ years, while Dalian iron ore futures were also supported in tandem with the gains seen across metals amid USD weakness. In the energy complex, both WTI and Brent crude futures trade relatively unchanged with WTI managing to hold above the key USD 50/bbl level following yesterday’s DoE inventory report which although showed a larger build than expected, the figure was relatively in-line with the latest API report. In Summary: European shares are near their session high with the basic resources and chemical sectors outperforming and media, utilities underperforming. The Italian and Spanish markets are the best-performing larger bourses, Swiss the worst. The euro is little changed against the dollar. German 10yr bond yields fall; Spanish yields decline. Commodities gain, with WTI crude, natural gas underperforming and copper outperforming. U.S. jobless claims, continuing claims, Bloomberg consumer comfort, CPI, FHFA house price index, Kansas City Fed index, durable goods orders, capital goods orders due later. In addition to the inflation data, we’ve got durable goods orders, capital goods order, jobless claims, FHFA house price index and the Kansas City Fed manufacturing activity print to keep us busy. Market Wrap S&P 500 futures up 0.2% to 2114.2 Stoxx 600 up 0.4% to 388.2 US 10Yr yield down 2bps to 1.94% German 10Yr yield down 4bps to 0.29% MSCI Asia Pacific up 0.5% to 146.9 Gold spot up 1% to $1217.1/oz Asian stocks rise with the Shanghai Composite outperforming and the Sensex underperforming. MSCI Asia Pacific up 0.5% to 146.9 Nikkei 225 up 1.1%, Hang Seng up 0.5%, Kospi up 0.1%, Shanghai Composite up 2.2%, ASX down 0.6%, Sensex down 0.9% Euro down 0.02% to $1.1359 Dollar Index down 0.01% to 94.21 Italian 10Yr yield down 11bps to 1.35% Spanish 10Yr yield down 12bps to 1.26% French 10Yr yield down 5bps to 0.56% Bulletin Headline Summary from Bloomberg and RanSquawk A rise in metal prices has provided a boost to European equities in what has been a session relatively void of macro newsflow so far The move higher in metal prices has seen AUD pare overnight losses, with CAD also benefiting, dragging USD/CAD below 1.2400 Looking ahead, the main focus for today’s session will come at 1330GMT/0730CST with the release of US CPI, Durables, Weekly Jobs and Canadian CPI DB's Jim Reid concludes the overnight recap: Just when you thought it was safe to look at other things, the Greece saga continues to generate interesting headlines. An area that we highlighted earlier in the week that continues to simmer is the tension within the current government itself following the accepted reform proposals. Yesterday we heard in the UK Telegraph that the economy minister Stathakis plans to block a potential privatisation of strategic assets. Specifically Stathakis was quoted as saying ‘we will cancel the privatisation the Piraeus Port’ and that ‘it will remain permanently under state majority holding’. Meanwhile the energy minister, Lafazanis, was quoted as saying that ‘there will be no energy privatisations’. The same article also noted that during a 12-hour closed-door crisis meeting for the government yesterday, the group’s left platform were said to have voiced their anger over the weekend’s news with an MP quoted as saying that ‘a lot of SYRIZA MP’s are very troubled by the deal and they are being pretty open about it’. The ongoing state of the relationship between members will clearly be an important issue to keep an eye on given the need for the refined reform proposals to pass through Greek parliament Quickly turning to trading in Asia this morning, bourses are largely trading firmer as we go to print. The Nikkei (+0.75%), Hang Seng (+0.76%) and Shanghai Composite (+1.39%) are all higher. The Kospi (-0.08%) is a touch lower. Just on China, our China economist Zhiwei Zhang yesterday previewed the upcoming annual meeting of the National People’s Congress (NPC) which is due to start March 5th. Zhiwei believes that the government will likely cut the growth rate for China to ‘around 7%’ from ‘around 7.5%’. At the same time he sees the government as possibly increasing the fiscal budgetary target and cutting the M2 growth target. Zhiwei believes that the policy tone will not be a huge surprise and these targets have been discussed since late 2014. Rather the tone is to allow slower growth and to broadly maintain the current policy stance. He does believe however that policy and growth targets are inconsistent and that the downward pressure on growth is at its highest since 2008. Zhiwei reiterates his view that there are rising risks of a mini-hardlanding in 2015 and that the economy continues to face a fiscal shock. Our colleagues believe that their 7% GDP forecast faces downside risks as a result of policy easing happening too late and growth remaining weak in the second half of this year. Back to markets yesterday, it was fairly subdued on the whole with the US in particular appearing to be in a holding pattern between Yellen’s talks and today’s inflation data. In terms of price action, the S&P fell from its all-time highs to close -0.08% although in reality it traded in a narrow range for much of the day. There were similar subdued moves in Treasuries with the 10y benchmark yield finishing 1.1bp lower at 1.969%. The Dollar meanwhile closed weaker with the DXY finishing 0.30% lower. Oil markets did however give a boost to equity markets as the energy component finished +0.42%. Both WTI (+3.47%) and Brent (+5.06%) took a sharp leg higher after recent weakness following reports on Bloomberg that the Saudi Arabian oil minister commented that demand is still growing. Closer to home, bourses in Europe were generally softer although like US equities, they also traded in a fairly subdued manner. The Stoxx 600 (-0.13%) and CAC (-0.09%) finished lower although the DAX (+0.04%) closed a touch higher. Bonds markets were firmer however with 10y yields in both Germany (-4.9bps) and France (-3.9bps) closing lower. Amazingly we also saw yesterday that Germany issued 5y Bunds at a negative yield for the first time on record. According to the FT, Germany managed to issue €3bn of the bonds at a yield of -0.08%. If you came down from Mars you wouldn't believe this was possible the day after we at DB raised our 2015 German GDP forecast from 1.4% to 2%. In fact the German yield curve is now trading in negative territory until the 7y maturity mark – which itself is also close to dipping below 0%. Away from the obvious focus on the CPI print in the US this afternoon, focus this morning in Europe will likely be on consumer confidence and employment data in Germany. As well as this, we’ve also got money supply data due in the Euro-area and retail sales out of Italy. Over in the UK, the preliminary Q4 GDP will keep us busy and at the same time we’ll receive various confidence indicators for the Euro-area. It’s no less busy in the US this afternoon. As well as inflation data, we’ve got durable goods orders, capital goods order, jobless claims, FHFA house price index and the Kansas City Fed manufacturing activity print to keep us busy.