Bond yields retreat

The euro has advanced to almost $1.09 against the dollar and is trading north of 88p against sterling, while the pound is hovering just above $1.23 against the US currency

Government bond yields have retreated with US and German 10-year yields falling to around 3.45% and a touch shy of 2.10% respectively and equivalent UK yields down to almost 3.20%

Flash PMIs published yesterday suggest the Euro area economy expanded slightly at the start of 2023 but point to a continuing contraction in the UK economy

ECB member Simkus says “core inflation remains strong and demonstrates that the fight against inflation is not over”, adding that there’s a “strong case” for 50 basis points increases in interest rates at forthcoming meetings

The annual rate of increase in UK manufacturers’ input and output prices decelerated in December, according to data published earlier this morning, though both remained in double-digit territory

It’s quiet on the economic data front for the rest of today with little of note scheduled