Main exchange rates little changed

The main exchange rates are not much changed at the start of play this week from where they were over the latter part of last week, with the euro still trading in and around the $1.0850 area against the dollar and the pound hovering around $1.2450 against the US currency. This leaves sterling trading at about 87p to the single currency, which indeed is where it has been trading for the past number of sessions

Stocks ended last week on a positive note, with European and US indices gaining around 3%, taking comfort it seems from signs that countries are having some success in managing COVID-19, in some cases allowing tentative steps to be taken to ease restrictions

Core bond yields generally headed south last week with both US and German 10-year yield falling by around 10bps or so, to about 0.63% and -0.48% respectively. They remain, though, off their year to date lows in 2020, set in early March, of 0.54% and -0.85% respectively

The annual rate of inflation in the Euro area fell in March, to 0.7% from 1.2% in February, mainly reflecting the impact of the recent decline in oil prices, and has probably further to fall in the short-term, as the ECB has acknowledged

The Rightmove measure of UK house prices reports a monthly fall of 0.2% in April, with the year-over-year rate of increase decelerating to 2.1% from 3.5% in March

It is quiet data-wise today, while over the remainder of the week UK labour market (Tuesday), CPI Inflation (Wednesday) and retail sales (Thursday) are all scheduled for release, with flash PMIs for the major economies due on Thursday