Euro slips back

Having – some surprisingly in hindsight – strengthened to around $1.11 against the dollar immediately following Thursday’s ECB meeting, the euro is slipping back again now, briefly dipping below $1.10 yesterday evening and trading around this level this morning (perhaps as the market takes more fully on board the significant easing of monetary policy announced by the ECB  last week). Meanwhile, sterling has also slipped back against the dollar, to trade at about $1.24 this morning, but is largely unchanged against the euro at just over 88.5p

Despite the spike in oil prices, bond yields in the core markets are edging lower having risen sharply last week. Benchmark 10-year yields in the US are now down around 7bps from last Friday’s close at 1.83%, while equivalent German yields have dipped by around 4bps to just under -0.5%

Following his meeting with Boris Johnson yesterday, Jean-Claude Juncker said the EU is “available to work 24/7” with the UK to reach an agreement but said that no “legally operational solutions” had been put forward yet by the UK side to date

Brent crude oil prices are hovering just below $69 per barrel this morning, up $9 from last Friday’s level, following the attack on an important Saudi production facility over the weekend. If sustained, higher oil prices will lead to (temporarily) higher inflation but will dampen economic growth, so central banks will tend to look through the former and focus on the latter. Hence the Fed, for example, is unlikely to be deterred from cutting interest rates again at the conclusion of its two-day meeting tomorrow

Data due today includes the ZEW Index of German investor sentiment and industrial production in the US