Dollar gives up more ground

European and US equity markets managed to close in positive territory for a second day running yesterday, something we haven’t seen in a while, though Asian stocks have sagged in overnight trading. The dollar has given up some more ground to the euro to trade just above $1.09 this morning, and has also weakened to almost $1.19 against the pound, leaving the latter really little changed against the single currency at just under 92p. Meanwhile, core bond yields are edging lower with German 10-year yields down to around -0.30%

Former ECB President Mario Draghi says a “deep recession is inevitable” because of Covid-19 and that the task of policy-makers is to prevent recession “morphing into a prolonged depression”,  which he says means that “the loss of income incurred by the private sector must eventually be absorbed onto government balance sheets” (this indeed is what many governments are attempting to do)

The Senate has passed the $2 trillion support plan for the US economy, which will now go to the House of Representative for approval, while the European Council meets by video conference today to try to agree a co-ordinated response to the current crisis

The Bank of England announces its latest policy decision at noon, but having cut interest rates twice just in the past two weeks and reactivated QE, it may decide to take stock today

Data due today include retail sales in the UK and new jobless claims in the US, the latter expected to show a significant Covid-19 related spike for the week ending 21st March