Euro retreats a little

The euro came within a whisker of $1.15 against the dollar yesterday but has retreated a bit since, partly due to weaker the expected German economic data, and is trading at around $1.1450 this morning. Sterling is also a touch softer against the US currency at about $1.2750, leaving the pound still hovering just below the 90p level against the euro as the Brexit debate in the UK parliament continues

It was a mixed day for equities yesterday with European stocks slipping but US indices advancing for a second consecutive session (the S&P 500 in the US is now about 8% off its recent low set on Christmas Eve). Bond yields in the core markets edged up with the benchmark US 10-year yield closing at 2.70%, some 15bps off last week’s lows

Industrial production in Germany fell for a third consecutive month in November (from October) and was also almost 5% lower than in the same month in 2017

Fed member Bostic says he favours one further hike in US interest rates – he had previously been arguing for two – though current market pricing implies it thinks the Fed is done raising rates

Data due today includes the European Commission’s Economic Sentiment Indicator for the Euro area and the small business optimism index and job openings in the US