Main currencies little changed

The main currencies are not much changed this morning though if anything sterling is nudging slightly higher, trading not far shy of $1.3950 against the dollar and very close to 87p against the euro. The single currency, meanwhile, continues to hover just below $1.2150 against the dollar

European stocks chalked up solid gains yesterday, closing more than 1% higher (US equity markets were closed for President’s Day). On the bond markets, German and UK 10-year yields both finished around  5bps higher at -0.38% and 0.57% – they have now risen by about 20bps and 40bps respectively since the end of last year – while, overnight, equivalent US yields nudged up to 1.23% (and are up 40bps since end-year)

ECB member McCaul says, while the economic recovery in the Euro Area may be delayed because of extended lockdowns or new variants of COVID-19, it will “take place” and will not be derailed

Industrial production in the Euro Area fell in the final month of 2020, declining by 1.6% from November and remained slightly below its level in the corresponding month in 2019

Data due today include Euro Area GDP and employment, both for Q4 2020.  The preliminary GDP estimate published previously showed the economy contracted by 0.7% in the final quarter of last year as public health restrictions were re-imposed in many countries