Dollar on the back foot

The euro and sterling have both gained some further ground against the dollar with the single currency trading not too far off $1.22 this morning and the pound looking like it might test the $1.41 level. This in turn leaves the euro-sterling exchange rate little changed overall at around 86.5p

European and US stocks both closed lower yesterday although the losses were modest enough, while US 10-year yields ended the day a little higher at 1.37% with equivalent German yields ending off their highs at -0.33%

ECB’s Largarde says the central bank will continue to support all sectors of the Euro Area economy by “preserving favourable” financing conditions, and it that regard, she noted that the ECB is “closely monitoring the evolution of long-term nominal bond yields” (the latter have risen quite a bit in recent weeks and the ECB clearly doesn’t want the increase to extend too far)

The unemployment rate in the UK rose to 5.1% in Q4 from 4.8% in the third quarter as the numbers in employment fell by 1114,000, or a quarterly0n-quarter decline of 0.4%. More positively, the government has announced a four-step plan for exiting lockdown, which if all goes well could be ended by late June this year

Data due today includes a final CPI inflation reading for January in the Euro Area and consumer confidence and house prices in the US