Main currency pairs little changed

The main currency pairs are not much changed from yesterday morning, having remained in relatively tight ranges during the course of yesterday’s session. The euro is trading at about $1.0510 against the dollar and at £0.8280 versus sterling, ahead of the no confidence vote in the French parliament this afternoon, while the pound is hovering just below the $1.27 level against the dollar this morning.

German government bond yields edged up yesterday, having fallen on Monday, while French bond yields nudged back down. US yields were slightly higher as they continued to reverse some of last week’s sharp decline. In equity markets, European stocks rose for a fourth straight session, adding about 0.7%, while the S&P 500 eked out a small gain to close at a new record high.

Fed member Daly says that, “in order to keep the economy in a good place, we have to continue to recalibrate (monetary) policy” by moving interest rates down to a more neutral level, which she believes is around 3%. Similarly, her colleague Goolsbee says rates are likely to fall a ‘fair amount’ over the next year or so.

The latest labour market data in the US show job openings rebounded strongly in October following a sharp decline in September. They remain on a downward trend though, falling by almost 4% in August-October from the three months to July.

There is a heavy enough schedule of economic data today, including final PMI services readings for November in the main economies; the ADP employment report, ISM services index, and factory orders in the US; and producer prices in the Euro area. A number of central bankers are due to speak over the course of the day, including ECB President Lagarde, Fed Chair Powell, and Bank of England Governor Bailey.