Euro firmer

The euro has regained some ground against both the dollar and sterling to trade closer to $1.13 and 85p respectively this morning, while the pound is steady at about $1.33 against the US currency

Concerns about the emergence of a new variant of COVID-19 in South Africa sees equity markets tumble at the open today (down around 3-4%) while bond yields have headed south, with US, German and UK 10-year yields around 10-15bps  lower

The minutes of the ECB’s October meeting, published yesterday, noted that while most members did not expect higher inflation to persist, the longer it did the more it could become “entrenched in longer-term inflation expectations”

Bank of England member Tenreyro says a “modest” increase in interest rates will be needed over the central bank’s 2-3 year forecast period, adding that the timing of the first hike “will depend on the evolution of the (economic) data” (though in truth an increase seems imminent)

It is very quiet on the data front today with little of note due for release