European stocks on the back foot

The euro is not much changed against the dollar this morning trading at around $1.05, but sterling has slipped to below $1.22 against the US currency. This in turn leaves the euro-pound exchange rate trading in and around 86p

European equity markets have opened on the back foot today, shedding almost 2% in early trading, while the futures market points to a weak start for US stocks later as well. In government bond markets, German and US 10-year yields are lower this morning at just under 1.70% and a touch above 3.20% respectively with equivalent UK yields down to around 2.55%

The annual rate of consumer price inflation in the UK ticked up to 9.1% in May from 9% in April, while the core rate – which excludes food and energy prices – nudged down to 5.9% (from 6.2%)

ECB member Villeroy says the central bank is lifting its “foot off the accelerator to normalize monetary policy, which means gradually coming back to more normal interest rates”, adding that inflation in the Euro area “should come back to 2% in 2024” (from just over 8% currently)

It is quiet on the data front again today with Euro area consumer confidence the only release of note