Euro slips again

The euro has found it tough going against the dollar this week. It has slipped further, trading down to a low of around $1.1120 yesterday before recovering a little, but at just below $1.1150 this morning it is now down about a cent from last week’s close. Sterling is holding up a little better against the US currency, though it too is lower on the week, but is a touch firmer against the euro at 86.3p

Bond yields in the core markets were largely unchanged yesterday after their leg lower on Wednesday (which  left German 10-yields back in negative territory), while European stocks slipped for a second consecutive session with US indices flat again having set new all-time highs on Tuesday

ECB member Ollie Rehn says the big question at the moment is “whether the European economy is experiencing a short and temporary phase of slower growth, which will soon be over driven by a recovery in the global economy, or whether it’s headed for a longer phase of slow growth, which would require a clearly more accommodating policy”

The key data release today is first quarter 2019 GDP in the US, which the consensus expects to have increased at an annualised rate of 2.3%, the same pace of growth as in the final quarter of 2018. It seems consumer spending, which accounts for the largest share of GDP, slowed again in Q1, which on its own will take a bit off overall growth, but there are likely to be offsets to this elsewhere including from net exports