Bond yields nudging higher

The euro shed almost a cent against the dollar last week and kicks off this week trading at around $1.0885. The single currency also lost ground to sterling, weakening by almost 1p, and is trading at about 85.4p this morning. The pound was marginally firmer against the dollar last week and is trading at $1.2740 at the start of play today.

In government bond markets, UK and US 10-year yields rose by 15bps and 10bps to 4.67% and 4.25% respectively last week, while equivalent German yields were largely unchanged at 2.62%. Yields generally are nudging higher again this morning.

The annual rate of headline CPI inflation in the Euro area dipped to 5.3% in July from 5.5% in June according to the final reading, confirming the flash reading, while core inflation remained at 5.5% last month (also confirming the initial estimate).

In the UK housing market, asking prices fell by 1.9% in August according to the latest Rightmove survey, following a decline of 0.2% in July.

The annual Jackson Hole Economic Policy Symposium takes place this week from Thursday to Saturday, with the Fed’s Jerome Powell and the ECB’s Christine Lagarde both scheduled to speak on Friday, ahead of their respective central bank meetings next month.

In what is otherwise a quiet enough week on the economic data front, the main releases of note are the flash PMIs for the Euro area, UK and US due on Wednesday