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 Good morning. Here's what you need to know. — Markets seem to have reverted to "risk off" mode to close out the week. S&P 500 futures are down 0.8%, and have already completely erased yesterday's big rally. Asian stock indices mostly closed lower and European indices are getting hammered across the board. Emerging-market currencies like the Turkish lira and the South African rand are tumbling against the dollar, and the dollar is sliding against the euro and the yen. Meanwhile, gold and U.S. Treasury futures are turning in a strong performance. — German retail sales unexpectedly tumbled 2.5% from the previous month and 2.4% from the previous year in December. The consensus forecast among market economists called for a 0.2% and 1.9% rise, respectively. Across the eurozone, the unemployment rate remained unchanged in December at 12.0%, defying consensus expectations for a tick up to 12.1%, while consumer price inflation unexpectedly slowed to 0.7% year over year from 0.8% — economists were looking for inflation to accelerate to 0.9%. — Japanese consumer price inflation hit a 5-year high of 1.6% year over year in December. Excluding food and energy, prices rose 0.7% year over year, accelerating from November's 0.6% rate. Meanwhile, Japanese unemployment fell faster than expected in December to 3.7% from November's 4.0% rate. Economists were looking for a tick down to 3.9%. — Emerging markets suffered big outflows this week. "EPFR is reporting that in the week through January 29, U.S.-based emerging market equity funds saw $6.3 billion of net withdrawals, the most since August 2011," say currency strategists at Brown Brothers Harriman. "On the month, some $12.2 billion has left. Emerging market bond funds reportedly experienced $2.7 billion redemptions over the course of the week and close to twice as much on the month." — Bond traders are passing around a new Peterson Institute white paper authored by Brian Sack and Joseph Gagnon proposing a new monetary framework in which the Fed uses the reverse repo facility it is currently testing to conduct monetary policy in the future. Kenneth Silliman, head of U.S. short-term rates trading at TD Securities, says the paper may have "created the late-session bid to the front-end of the U.S." — This morning in the United States, we get December personal income and consumer spending data, out at 8:30 AM ET. Economists predict incomes rose 0.2% in December, matching November's pace of growth, while spending growth is expected to have slowed to 0.2% from 0.5%. — Also out at 8:30 is the release of the Fed's favorite measure of inflation, the monthly price index of core personal consumption expenditures. Economists predict core PCE accelerated to 1.2% year over year in December from November's 1.1% reading. — The results of the monthly Chicago Purchasing Managers Index survey are released at 9:45. Economists predict the index fell to 59.0 from December's 60.8 reading, indicating a slight slowdown in the pace of improvement in business conditions for Midwest manufacturers. — The final results of the University of Michigan's monthly consumer confidence survey round out the week's data releases at 9:55. Economists predict the report's headline index fell to 81.0 from 82.5 in December, slightly better than the preliminary 80.4 reading released by Michigan two weeks ago. — Russian GDP growth slowed to 1.3% year over year in 2013 from 3.4% in 2012, worse than economists' consensus estimate of a slowdown to 1.5%. The data highlight the trouble that Russia and many other emerging markets face — slowing growth at a time when portfolio outflows and current account imbalances are putting pressure on their currencies. | 
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