Main exchange rates steady

The main exchange rates are broadly steady this morning. The pound is holding onto to its Nigel Farage-inspired gains of Monday, trading below the 86p level against the euro and at around $1.2850 against the dollar. The latter is turning is consolidating against the single currency following last week’s gains, as it continues to hover just above the $1.10 level (its most recent high was just under $1.09 set back in early October, so it’s still a bit away from that)

Bond yields in the core markets have edged down a little so far this week – to around 1.92% and -0.28% in the case of US and German 10-year yields respectively – but they remain substantially above their year to date lows (by about 40-45bps) set as recently as early September

Employment growth in the UK slowed to 1.0% year-on-year in the third quarter of the year from 1.3% in the second quarter,  though the unemployment rate edged down to 3.8% from 3.9% in Q2 (and compared to 4.1% in the third quarter of 2018)

Donald Trump in a speech yesterday did not give anything away about when ‘phase one’ of a trade deal with China might be signed and, indeed, warned that a failure to get it done would lead to steeper tariffs being imposed on China

Data due today includes industrial production in the Euro Area and CPI inflation in both the UK and the US, while Fed Chair Powell addresses Congress on the US economy and monetary policy