Dollar firmer

The euro and sterling are on the back foot against the dollar again dipping to $1.12 and to around $1.33 respectively, while the single currency-pound exchange rate continues to trade at about 84p

Government bond yields are largely unchanged with US and UK 10-year yields at 1.65% and 1.0% respectively and equivalent German yields at -0.23%

In the US, the annual rate of PCE inflation (the Fed’s target measure) accelerated to 5.0% in October from 4.4% in September, while the core – or underlying – rate rose to 4.1% (from 3.7%)

The minutes of the Fed’s October monetary policy meeting, published yesterday evening, noted that many officials pointed to a number of factors – such as businesses’ enhanced scope to pass on higher costs to their customers, the possibility that wage growth had become more sensitive to labor market pressures, or accommodative financial conditions – that might result in elevated inflation remaining persistent

ECB member Panetta says “monetary policy should remain patient (in the face of higher inflation)”, adding that “a premature tightening would restrain spending before demand has returned to trend”

It is quiet on the data front today with little of note due for release