Oil prices under pressure

Oil prices fell further yesterday after OPEC reported that Saudi Arabia had increased production in February, with Brent crude trading down to a low of around $50 p/b at one stage. However, Saudi Arabia has stated its commitment to the output cuts agreed last November – it should be noted that it cut production in January by more than was required under the agreement – which has helped prices rebound to over $51 this morning

Bond yields dipped as oil prices headed south, with 10-year yields in the US trading back below 2.6% and equivalent German yields falling to under 0.45%

Sterling has steadied after losing ground at the very start of the week. It is the best part of a penny firmer against the euro at just under 87p, and has gained more than a cent against the dollar to trade back above $1.22. Meanwhile, the euro is not much changed against the dollar at over $1.06

The Fed looks certain to raise interest rates by 25bps today and so the market will be more interested in how many more hikes it signals for the remainder of this year (back in December it indicated that 3 hikes would be appropriate in 2017)

Dutch voters head to the polls today in the country’s general election, with the focus on how the far-right Party for Freedom performs

Data due today include the latest labour market report in the UK and CPI and retail sales in the US