Dollar slips

The euro and sterling are both a touch firmer against the dollar this morning trading north of $1.05 and just above $1.24 respectively, which in turn leaves the single currency-pound exchange rate largely unchanged at around 84.5p

Equity markets advanced yesterday, helped by solid economic data in the US, while government bond yields rose with German and US yields increasing by around 10bps to 1.05% and 2.98% respectively

Retail sales in the US rose by 0.9% in April, following a gain of 1.4% in March, while industrial production rose by 1.1% last month, both suggesting the economy started the second quarter of the year on a solid footing

Fed Chair Powell says the central bank needs to “see…inflation (in the US) coming down in a clear and convincing way, and we’re going to keep pushing (up interest rates) until we see that”

The annual rate of consumer price inflation in the UK accelerated to 9% in April according to data published this morning, up from 7% in March and mainly (though not exclusively) reflecting the impact of a 54% increase in domestic energy bills last month

Data due today include a final CPI inflation reading for April in the Euro area and housing starts and building permits in the US