ECB likely to stay on hold today

The euro is marginally firmer against the dollar this morning trading at just over $1.18, as is sterling which is hovering around the $1.30 level against the US currency. This leaves the pound trading close to 91p against the euro, off its most recent high of under 89p in the middle of last week as well-reported Brexit-related issues weigh on the currency

There was some respite for US stocks yesterday as they broke a losing streak lately to close with gains of around 2%, with European indices also ending higher on the day, while core bond yields nudged up though really they continue to trade in relatively narrow ranges

It is reported that the EU is studying the possibility of legal action against the UK over the Johnson government’s plans to override aspects of the Withdrawal Agreement, while the House Speaker in the US  says there would be “absolutely no chance” of a trade agreement with the UK if “Brexit undermines the Good Friday accord”

As the ECB prepares to announce its latest policy decision later today, “sources” say the central bank is confident that its baseline scenario for the Euro Area economy – which still envisages a sharp fall in GDP this year – is on track, that any changes to its macroeconomic forecasts will be small, and that there is no need for any further stimulus at this juncture

Data due today includes jobless claims and producer prices in the US