Euro not much changed this morning

The euro is not much changed against the dollar and sterling this morning trading a little north of $1.12 and jut shy of 87p respectively, while the pound is trading close to $1.29 against the dollar having lost ground yesterday following the latest UK inflation data.

In government bond markets, German 10-year yields reversed course during yesterday’s session, moving back up to around 2.40%  while US yields closed marginally lower on the day at 3.75%. Meanwhile, UK yields are edging lower this morning, now down to around 4.15%

The annual rate of CPI inflation in the Euro area fell to 5.5% in June (from 6.1% in May) according to the final reading, unchanged from the flash estimate, but core inflation was revised up a touch to 5.5% (from an initial reading of 5.4%).

ECB’s Nagel says “virtually everyone is anticipating a 0.25 percentage-point increase” in interest rates at next week’s meeting (27th), adding that “rates will rise as high as necessary and stay at that level for as long as is needed…to bring inflation back to our target rate of 2%.”

Economic data due today include consumer confidence in the Euro area and jobless claims and existing home sales in the US.