Dollar on the back foot

The euro and sterling have both regained ground against the dollar – albeit in thin markets due to Thanksgiving in the US – strengthening to over $1.04 and to just shy of $1.21 respectively. This in turn sees the pound trading at around 86p against the single currency, about 1p firmer from yesterday morning

Government bond yields continue to head south, with benchmark US 10-year yields now down to 3.70% and equivalent German and US yields falling to 1.85% and 2.95% respectively

Equity markets continue to notch up modest gains – European and US stocks both added another half a percent or so yesterday

The Euro area and UK economies may contract in the final quarter of this year judging by the latest PMIs, which were again running below the key 50 level in November albeit improving slightly from October

The minutes of the Fed’s meeting earlier this month – at which it hiked by 75 basis points for a fourth consecutive time – note that “as monetary policy approached a stance that was sufficiently restrictive to achieve the (inflation) goals, it would become appropriate to slow the pace of increase” in interest rates, and that such a “slowing…would likely soon be appropriate”. This points to a 50 basis points rate increase at next month’s meeting

Economic data due today includes the Q3 labour market survey in Ireland