The euro and sterling are both pushing on against the dollar this morning, trading just above $1.09 and $1.24 respectively. This in turn sees the single currency-pound exchange rate continuing to trade a touch below 88p
Government bond yields backed up on Friday. German 10-year yields rose by the best part of 15 basis points (bps) to almost 2.20%, with equivalent US and UK yields both increasing by 10bps to 3.50% and 3.40% respectively
Fed member Waller says he currently favours “a 25-basis point increase” in interest rates at next week’s meeting, adding “beyond that, we still have a considerable way to go toward our 2% inflation goal, and I expect to support continued tightening of monetary policy.
ECB’s Knot says the central bank “made a step down in (the pace of increase in interest rates) in December from 75 to 50 basis points” and that “that will be the pace for a multiple number of meetings…I do think that we will continue to be in tightening mode until the summer”
Economic data due this week include flash PMIs for January in the Euro area, UK and US tomorrow (Tuesday) and Q4 GDP (first estimate) and PCE inflation in the US on Thursday and Friday respectively