Quiet start to the week

It was a relatively quiet start to the week in currency markets, though both the euro and sterling managed to claw back some of last week’s falls against the dollar. They are trading at around $1.0850 and $1.2650 respectively this morning, leaving EURGBP sitting just below 86p.

In government bond markets, yields edged higher yesterday partially reversing some of last week’s decline with US, German and UK 10-year yields increasing by around 5bps. Equity markets, meanwhile, had a mixed session as European stocks chalked up small gains but US indices ended in the red.

Fed member Cook says “the path of disinflation…has been bumpy and uneven,” but that “a cautious approach to easing monetary policy (can) ensure that inflation will return sustainably to 2% while (maintaining) a strong labour market.”

The latest Confederation of British Industry retail sales survey reported broadly flat sales volumes in the year to March in the UK, though it does note that falling inflation (which is likely to decline to under 2% over the next few months) should support retail spending going forward.

There is a heavy enough schedule of economic data in the US today (but little or nothing elsewhere) with consumer confidence, house prices and durable goods orders due for release.