Cautious optimism spotted on Monday

Later today, the preliminary EU GDP data for the fourth quarter are due, expected to decline sharply to 0.3% quarter-on-quarter, down from 2.2% in the third quarter. On the other hand, the yearly change will likely improve to 4.7% from 3.9% a year ago.

German CPI inflation will also be released, forecast to slightly decelerate to 4.3% yearly. The monthly change is expected to turn negative.

The Chicago Purchasing Manager's Index and the Dallas Fed Manufacturing Business Index for January are due during the US session. However, these indices rarely cause any market volatility. 

US equities staged an impressive comeback on Friday, but all the main equity benchmarks remain below their respective 200-day moving averages. Thus, the medium-term trend still seems bearish.

US short-term yields advanced today, again, pushing the 2-year yield back toward 1.2%. On the other hand, the 10-year declined slightly and traded below 1.8%, further flattening the yield curve. 

Elsewhere, the greenback slid today as traders took some profits from the recent rally. However, as long as the EURUSD pair trades below the 1.12 threshold, the outlook seems bullish for the USD.