Euro firmer

The euro is slightly firmer this morning trading back a touch above $1.18 against the dollar, though it still remains off its best levels of late last week, and at just over 90p against sterling. This sees the pound trading below $1.31 against the US currency, again off its highs of last Friday

Core bond yields are continuing to nudge down with US 10-year yields trading at 0.52% and equivalent German yields at -0.55%, while 10-year bond yields in the UK continue to set new all-time lows and are trading at just 0.08% this morning

ECB Chief Economist, Philip Lane, notes that while there has been some rebound in economic activity in the Euro area, the level of economic slack remains extraordinarily high and the outlook highly uncertain, adding that progress in containing the virus will be central in determining the size and speed of the recovery

Fed member Daly, in a similar vein,  says “it’s becoming quite clear that the virus will be with us for longer and more vigorously than anyone had hoped for….the length of the support that the (US) economy is going to need…just has to be longer.”

Data due today includes services PMIs in the main economies along with the ISM index of non-manufacturing activity (mainly services) in the US