Bond yields higher again
Bond yields jumped again yesterday, with 10-year yields in the US, UK and Germany rising by 7-9bps, partly reflecting a further increase in oil prices (Brent crude rose above $54.5 p/b for a time before easing back). Yields in the US are now closing in on 2.50%, which would be their highest level since 2014
The dollar has given up some ground to the euro to trade just below $1.07 (which compares to a high last week of a little over $1.05) and is a touch weaker against the Japanese yen
Sterling spiked higher against both the euro and the dollar, after comments by the UK’s Brexit Minister that the government would ‘consider’ making a contribution to the EU to retain access to the single market. It has since fallen back, however, and against the euro is largely unchanged from where it was yesterday morning at 84.5p
A Reuters news story says an extension of the ECB ‘s QE programme beyond the current expiry date of March 2017 ‘is inevitable given weak underlying inflation and heightened political risk’, citing senior central bank sources
The main data release today is the US employment report for November, while of course the constitutional referendum in Italy takes place on Sunday