The euro is a touch softer against the dollar trading back below $1.07 this morning, while the pound has advanced a bit further against the US currency to around $1.2150 and is also firmer against the euro trading just under 88p.
Government bond yields have collapsed as the market reassesses the outlook for central bank interest rates in the wake of the shock to the banking system in the US, with US and German 2-year yields, for example, closing around 60bps lower yesterday and they are continuing to head south this morning.
In equity markets, European stocks shed around 3% yesterday, after losing about 2% last week, though US indices did manage to close more or less flat on the day.
ECB member Stournaras says “we don’t see any impact from SVB (Silicon Valley Bank) on Eurozone banks”, echoing comments from the head of the Eurogroup of finance ministers, who said there is “no direct exposure…to SVB”.
Employment in the UK rose by 65k – or 0.2% – in the three months to January (from the three months to October) and the unemployment rate was unchanged at 3.7%, while the annual rate of growth in weekly earnings in the private sector eased for a second month running in January (to 6.2%) but picked up again in the public sector (to 5.4%).
Economic data due today include CPI inflation for February in the US, with the consensus expecting the headline rate of inflation to fall to 6.0% (from 6.4% in January) and the core rate to dip to 5.5% (from 5.6%).