Main currency pairs steady

The main currency pairs are not much changed this morning with the euro and sterling still trading close to $1.15 and at over $1.37 against the dollar respectively, while the single currency-pound exchange rate is trading at around 83.5p

US equity markets sold off into yesterday’s close, with the S&P 500 ending more than 1% lower, and European stocks have opened lower this morning as a result. Government bond yields have nudged down further with US and German 10-year yields now at circa 1.70% and -0.10%

Economic activity in the UK picked up pace in November with GDP increasing by 0.9% (after monthly growth of 0.2% in October), taking it above its pre-pandemic level in February 2020

Fed member Waller says “three hikes (in US interest rates in 2022) is…a good baseline; we will have to wait and see what inflation looks like in the second half of the year”, adding that if inflation “continues to be high, the case will be made for four, maybe five, hikes”

Data due today include retail sales, consumer confidence and industrial production in the US