Dollar a touch firmer

The euro and sterling have both slipped back against the dollar – which is benefiting from weakness in equity markets – to trade close to $1.0350 and a little under $1.20 respectively this morning, leaving the single currency-pound exchange rate trading just above 86p

Equity markets in Europe and the US lost ground yesterday amid concerns about street protests in China, shedding around 1% and 1.5% respectively, having chalked up solid gains last week

In government bond markets, German 10-year yields have edged down this morning, trading below 1.95%, while US yields are largely unchanged as they continue to hover just below 3.70%

ECB President Lagarde says the central bank is “committed to bringing inflation down to our medium-term target”, adding that “we expect to raise rates further to the levels needed” to achieve this

Fed’s Williams says “stronger demand for labour, stronger demand in the economy, and somewhat higher underlying inflation, suggest a modestly higher path for (US interest rates)” than previously anticipated

Data due today include the Economic Sentiment Indicator for the Euro area; mortgage approvals in the UK; and consumer confidence and house prices in the US