Quiet start to the week in markets

It was extremely quiet across FX, bond and equity markets yesterday, with the US on a public holiday and little or nothing in the way of economic data. In the currency markets, the euro is still hovering just below $1.08 against the dollar this morning, while the pound has slipped back below $1.26 against the US currency and is trading at around 85.6p to the euro.

With the latest GDP data in the UK showing the economy in recession over the second half of 2023, the former Chief Economist of the Bank of England, Andrew Haldane, says the case for lowering interest rates is “strong and strengthening”, adding that he’s “fearful” the BoE will leave it “too late in the year” to ease policy.

Staying with the UK, the latest report from Rightmove provides further evidence that the housing market is gradually improving, probably helped by a recent easing in mortgage rates. Asking prices rose for a second consecutive month in February (+0.9% month-on-month) to leave them slightly ahead of February 2023, the first positive year-on-year reading since last July.

It is quiet enough on the data front again today with the Conference Board’s leading index of economic activity scheduled in the US and construction output due in the Euro area. The ECB publishes data on negotiated wages in the Euro area, which will be of interest, while some members of the Bank of England MPC appear before the Treasury Committee to discuss the latest Monetary Policy Report.