Currency markets calm

It was relatively quiet on currency markets again yesterday with the dollar continuing to drift higher. It has come off a little against the euro to trade at around $1.077 this morning, which is unchanged from yesterday morning, but remains firmer against sterling at about $1.258, with the pound also a touch softer against the single currency at 85.6p.

Longer-maturity government bond yields fell further during yesterday’s session, helped along by some more soft US labour market data, with 10-year yields down another 5-10bps. There has some retracement in US yields overnight, which is spilling over to German and UK yields this morning.

Oil prices continue to head south with Brent crude falling to just under $75 per barrel, which is not far off its 2023 to date low of just under $72 p/b in mid-June.

Jobs growth in the US remained relatively soft in November according to the ADP report, with private employment increasing by 103k after a gain of 106k in October, well down from the average monthly gain of almost 200k in Q3. Attention now turns to the tomorrow’s official jobs report.

Economic data due today include a second estimate of Q3 GDP in the Euro area – the economy contracted by 0.1% according to the first estimate – and the regular weekly jobless claims numbers in the US.