Further employment gains in the US

The euro is trading at around $1.18 against the dollar this morning having fallen back from a high of $1.20 over the latter part of last week, while sterling is hovering around the $1.32 level after also losing ground against the US currency late last week, all of which leaves the euro-pound rate at around 89.5p. Equity markets closed lower again on Friday, while core bond yields, somewhat surprisingly, ended higher on the day

The US economy regained another 1.4 million jobs in August according to Friday’s “payrolls” report, following an increase of 1.7 million in July, while the unemployment rate fell to 8.4%, down from 10.2% in July and a peak of 14.7% in April, although Fed Chair Powell said to get back to full employment “we need to get the disease under control”

Industrial production in Germany expanded for a third month in a row in July albeit modestly so, increasing by 1.2% month-on-month after high signal-digit gains in May and June

The UK and EU will conduct another round of formal talks on a new relationship this week, but the mood music is not good with Boris Johnson again insisting the UK is prepared to walk away without a deal

The ECB meets this Thursday against the recent backdrop of a fall in inflation, signs the rebound in economic activity may be moderating, and an appreciation of the euro, all of which the central bank will factor into its updated set of macroeconomic forecasts. On balance though, the market still expects the ECB to keep policy on hold at this week’s meeting

Data due this week includes GDP in the Euro Area (Q2) and the UK (July) on Tuesday and Friday respectively, as well as CPI inflation in the US on Friday also, while here at home GDP data for Q2 is published later this morning having been deferred from last Friday