Main exchange rates steady

The main currency pairs are little changed with the dollar consolidating following its recent gains trading at just over $1.09 against the euro and at under $1.30 against sterling, which leaves the single currency  hovering around 84p to the pound.  Meanwhile, core bonds yields have edged higher as equity markets advance (the S&P 500 in the US closed at an all-time high yesterday)

The ECB President, Christine Lagarde, has again called on governments to support the Euro Area economy, noting that “when interest rates are low, fiscal policy can be highly effective: it can support euro area growth momentum, which in turn intensifies price pressures and eventually leads to higher interest rates.”

The UK economy flat-lined in the final quarter of 2019 with GDP showing zero growth from the third quarter, while the year on year rate of growth slowed to 1.1%. However, survey data covering the post-election period suggest activity picked up at the start of 2020

The Fed’s Bullard notes that “experience with previous viral outbreaks suggests that the effects on US interest rates can be tangible and last until the outbreak is clearly contained,” pointing to the effects on the 10-year bond yield of other viral outbreaks, such as SARS, swine flu, avian flu and Ebola

Data due today includes industrial production in the Euro Area and the RICS housing survey in the Euro Area