Dollar loses a little ground

The dollar is slightly weaker against both the euro and sterling, which are trading close to $1.21 and north of $1.39 at the off this morning. This in turn leaves the single currency-pound exchange rate largely unchanged from late last week hovering just below the 87p level

Equity markets lost a little ground over the course of last week, while core bond yields were broadly flat overall with US and German 10-year yields closing out Friday at 1.58% and -0.26%

Economic activity in the Euro Area and the UK picked up in April judging by the ‘flash’ PMI readings published on Friday, with the composite indices in expansionary territory (>50) at 53.7 and 60.0 respectively

The Fed meets this Tuesday and Wednesday and is set to again keep both interest rates and the pace of its bond purchases ($120bn per month) unchanged

Data due this week includes a first estimate of first quarter GDP in the US and the Euro Area on Thursday and Friday respectively, while CPI inflation and unemployment for the Euro Area are scheduled for Friday also