Bond yields nudge lower

The euro and sterling have both slipped a little against the dollar to trade a touch below $1.0950 and at $1.24 respectively this morning, which in turn leaves the single currency-pound exchange rate little changed still hovering just above 88p

US and German government 10-year bond yields have nudged down over the past couple of trading sessions, both declining by around 10bps to 3.52% and 2.42% respectively. Equivalent UK yields have also reversed most of the (UK) inflation data-related spike that occurred earlier in the week to stand at around 3.75% this morning

Retail sales in the UK ended the first quarter of the year on a soft note according to data published earlier this morning, falling by 0.9% in volume terms in March, though this did follow two months of strong gains in both January and February. For Q1 as a whole, sales volumes were up 0.6% from the final quarter of 2022

ECB’s Lagarde says “we have inflation that’s too strong compared to our target, and has been for some time,” noting that the central bank has delivered “a significant amount” of monetary policy tightening but that “there’s still a little way to go on the path” of raising interest rates

Fed member Harker says he thinks interest rates “are close to where we need to be”, adding that the central bank needs “to be a little cautious here to not just respond to the current level of inflation, but where we think it’s going”

Economic data due today include flash PMIs for April for the Euro area, UK and US