Euro little changed post ECB meeting

The euro is little changed following yesterday’s ECB meeting, trading at around $1.1350 against the dollar and circa 90p against sterling. The pound, meanwhile, is managing to hang onto its gains against the US currency, hovering around the $1.26 level, after it had threatened to break a good deal lower earlier in the week

As expected, the ECB confirmed that bond purchases under its QE programme will end this month, while it reiterated that interest rates will remain at their current level at least through the summer of 2019. However, it said recent soft economic data may indicate “some slower growth momentum ahead” and that the balance of risks to the outlook “is moving to the downside”, suggesting it may not take an awful lot for the ECB to alter its forward guidance on interest rates i.e. say rates may remain unchanged for even longer than it currently anticipates

Asian equity markets were under pressure overnight amid softer than consensus economic data out of China. This is spilling over into European stocks this morning, with bond yields in the core markets edging down as a result

Following yesterday’s summit, EU leaders say they will work speedily to reach a new trade agreement with the UK so that the backstop will not need to be triggered, but that if the backstop were nevertheless to be triggered “it would apply temporarily, unless and until it is superseded by a subsequent agreement that ensures that a hard border is avoided”.  This clarification, though, may not be enough (almost certainly won’t be?) to appease the DUP and dissenters in Theresa May’s party

Data due today include flash PMIs in the Euro area and retail sales plus industrial production in the US