Euro gains post ECB meeting

The euro strengthened and bond yields rose after the ECB left the stance of monetary policy unchanged following yesterday’s meeting but said it was unlikely that it would need to provide any additional stimulus (e.g. a cut in interest rates, or an expansion of QE) to the economy. If that’s the case, then its understandable that the market is now turning its attention to when the ECB might start to scale back some of the stimulus currently in place

The single currency is trading at around $1.06 against the dollar and has risen to over 87p against sterling, its highest level in about two months. German 10-year bond closed up around 5bps yesterday and they are higher again this morning

The ECB has not quite given the all clear yet, though, it must be said. While it notes that the risks to the economic outlook in the Euro area are less pronounced, it says they are ‘still tilted to the downside’, and it has reiterated that there are no convincing signs of a pick up in underlying (or core) inflation in the zone

US 10-year bond yields have broken to new highs (just above 2.6%) in advance of today’s ‘payrolls’ report and ahead of next week’s Fed meeting. In relation to the former, the consensus expects an increase in US employment of 200,000 in February with the unemployment rate expected to nudge down to 4.7%

Other data due today includes industrial production in the UK