Quiet start to the week

It was a quiet start to the week with the major currency pairs largely unchanged. The euro continues to trade in a relatively tight range of $1.1120 to $1.1220 against the dollar and is still hovering around 88p against sterling

Bond yields in the core markets edged lower yesterday. The decline in recent weeks has been notable, with US 10-year yields falling by the best part of 30bps since mid-May and equivalent German yields by circa 20bps

In the UK, the Conservatives and the DUP have agreed a confidence and supply arrangement which will see the latter providing voting support on a number of issues over the next 5 years. It also includes a financial package of 1 billion euro for Northern Ireland covering the next 2 years. Meanwhile, in the Brexit negotiations, the EU is still not happy with the UK’S offer in relation to citizens’ rights, so further work to be done there in seems

Fed member Williams says some ‘transitory’ factors have been ‘pulling inflation down recently’ and he believes that further gradual increases in US interest rates are still appropriate

Data due today include consumer confidence in the US, while there are a number of important central bankers scheduled to speak, including Draghi (ECB), Carney (BOE) and Yellen (Fed)