D5951-BOI-CB-Daily-Blog

Euro a little firmer

The euro is firmer against the dollar this morning at around $1.0650, and has now gained more than a cent from this week’s low of just over $1.05.  It has also recovered some ground against sterling to trade at about 85.5p

Bond yields in both the US and Europe were generally lower yesterday, with European ‘peripheral yields’ in particular recording a notable decline (up to 10bps)

The minutes of the ECB’s most recent meeting published yesterday noted that it ‘was imperative to maintain a very substantial degree of monetary accommodation for inflation pressures to build up and durably support headline inflation’. The ECB has said that QE will continue until the end of this year at least, and that interest rates will remain at current or lower levels until well after QE ends

Fed members continue to signal another increase in US interest rates in the period ahead, amid an on-going improvement in the jobs market and rising inflation (data yesterday showed the number of new jobless claimants running at a multi-decade low)

Data due today include retail sales in the UK and construction output in the Euro Area