Dollar halts its slide

The dollar halted its slide against the euro yesterday after four consecutive days of decline, while US 10-year bond yields recovered to finish largely unchanged at 2.23%, having earlier fallen to a low of 2.18%. US equity markets also rebounded from their intra-day lows, gaining 0.4%, perhaps a sign of relative calm returning to markets

The ECB believes that the outlook for economic growth has strengthened and appears ‘increasingly solid’, but underlying inflation pressures remain subdued and have yet to show a convincing upward trend, according to the minutes of its monetary policy meeting in April

Sterling popped higher versus the euro and the dollar as UK retail sales rebounded strongly in April, before giving up some of its gains – it is currently trading at around $1.2950 against the dollar and at just under 86p versus the euro

Despite recent market developments, the Fed’s Mester says she favours an increase in interest rates and also believes that the Fed could begin to reduce the size of its balance sheet by changing its re-investment policy before the end of this year if economic conditions evolve as anticipated

Quiet day on the data front with Consumer Confidence in the Euro Area the main release