While eurozone inflation came in a touch firmer than expected in January, German Bunds made significant gains Monday as markets reacted to United States President Donald Trump's tariff plans, said Daiwa Capital Markets.

Gilts also made gains on a quiet day for top-tier United Kingdom economic news, noted the bank.

With no top-tier eurozone data scheduled for release on Tuesday, the focus will no doubt remain on U.S. trade policy, stated Daiwa. European Central Bank Chief Economist Philip Lane's fireside chat at the Peterson Institute for International Economics will be watched for insights into the potential impact of U.S. tariffs on the eurozone economic outlook and how the ECB might respond.

In terms of the inflation outlook, the focus will also be on the ECB's forward-looking wage tracker data, which will likely point to slowing wage growth and as such fading inflationary pressures, in line with the Governing Council's expectations, pointed out the bank.

Wednesday will also bring an update on factory pipeline pressures, with higher energy prices expected to have driven an increase in eurozone producer prices (PPI) in December. However, headline PPI inflation will remain slightly in negative territory.

Meanwhile, the final composite and services PMIs for January also on Wednesday are expected to broadly align with their flash estimates. While still consistent with stagnating growth, the flash release encouragingly recorded the highest composite PMI for the eurozone in five months, up 0.6pt to 50.2. A modest upwards revision in Monday's final manufacturing output index -- up 0.3pt to a still-contractionary 47.1 -- raises scope for a further modest improvement. Finally, French industrial production figures for December are also due on Wednesday.

Ahead of Thursday's Bank of England monetary policy announcement, it should be a relatively quiet couple of days for the UK news flow, with just Wednesday's release of the final composite and services PMIs for January of note, according to Daiwa.

The final PMIs are expected to broadly align with the flash estimates which, despite not being as weak as initially feared, suggested that the composite output index -- up 0.5pt to 50.9 -- remained largely consistent with ongoing stagnation at the start of the year. With the survey likely to underscore that underlying demand remains weak and labor market conditions are deteriorating Wednesday's release should lend support to a 25bps cut in Bank Rate on Thursday.