Dollar a touch firmer

The euro and sterling are very marginally lower against the dollar this morning trading at about $1.09 and $1.24 respectively, leaving the single currency still hovering just below 88p against the pound

Government bond yields are largely unchanged at circa 3.50% and 2.20% in the case of US and German 10-year yields respectively and at about 3.35% for equivalent UK yields

Oil prices have backed up a little lately (to around $88 per barrel in the case of Brent crude), but the decline that has occurred over the past few months is helping to put downward pressure on headline rates of inflation in the major economies

ECB’s Lagarde notes that “while energy inflation has recently been coming down, underlying inflation continues to rise”, warning that “it is vital that inflation rates above the ECB’s 2% target do not become entrenched in the economy”

Economic data due today includes flash PMIs for January in the Euro area, UK and US