Draghi stresses patience

Market concerns about Trump’s tariffs haven’t worsened since this time yesterday, with US and European equities ending of their lows, albeit still down on the day overall, and bond yields in the core markets also finishing off their lows. Moreover, Asian stocks have put in a good performance overnight and European indices have opened in positive territory this morning (with core bond yields edging up accordingly)

The main exchange rates are not much changed. The euro continues to hover just below $1.16 against the dollar and at around 88p against sterling, which in turn remains just below the $1.32 level against the dollar.

The EU’S  chief Brexit negotiator, Barnier, says “serious divergences” remain on the “backstop” for Northern Ireland, with “more work clearly needed”, while Theresa May faces a vote on the UK government’s Withdrawal Bill in Parliament later today

Mario Draghi says the ECB can be patient before raising Euro area interest rates, and that when it does start to increase them it can do so at a gradual pace. Draghi also indicated that he is happy with the reaction to last week’s policy announcements,  particularly regarding its “enhanced forward guidance on interest rates”, implying that market expectations for a first rate hike towards the latter end of 2019 are reasonable

Draghi also highlighted downside risks to the economic outlook from “three main sources”: the threat of increased global protectionism; rising oil prices triggered by geopolitical risks in the Middle East; and the possibility for persistent heightened financial market volatility (which could, of course, also accompany the first two)

Data due today include existing homes sales in the US