Main currencies steady

The euro is holding onto its recent gains against the dollar, trading at well over $1.09 this morning, and remains north of 89p against the pound, which has also consolidated its move higher against the US currency as it hovers above the $1.22 level. Equities ended marginally lower following Monday’s strong performance, while core bonds yields were steady to marginally down on the day

ECB Chief Economist, Philip Lane, says the central bank continuously assesses whether its policy measures are appropriate to provide the necessary degree of support to the economy in the current uncertain environment, and so it remains “fully prepared to make further adjustments” if warranted

The annual rate of CPI inflation in the UK slowed to 0.8% in April from 1.5% in March, mainly reflecting the impact of lower energy prices, while the core rate (excluding primarily energy and food) dipped to 1.4% (from 1.6%)

About 10 million workers in the UK are now availing of the government’s wage subsidy schemes according to the Treasury, representing about 30% of the labour force, while as noted yesterday morning, there was a sharp rise in the so-called claimant count in April pointing to a jump in the unemployment rate

The number of new housing starts in the US fell sharply in April, declining by around 30% from March, while Fed member Kashkari says “it’s probably a year or two away before we start seeing really strong (US) economic growth”. He also indicated that there are other policy tools the Fed would use before adopting negative interest rates

Data due today includes CPI inflation in the Euro area, while the Fed publishes the minutes of its most recent monetary policy meeting