Respite for sterling

Sterling strengthened against the euro and the dollar yesterday  – to around 89p and $1.23 respectively  – as inflation in the UK rose to an almost two-year high of 1.0% in September. In addition, a government lawyer said any Brexit deal with the EU would ‘very likely’ be subject to UK parliamentary approval, comments which also lent some support to sterling

Equity markets rebounded after a soft start to the week, with US stocks gaining around 0.6% amid strong earnings reports and European indices rising by more than 1%

Core government 10-year bond yields edged lower for a second consecutive day – by 2-4bps – having risen sharply over the past couple of weeks

Annual inflation in the US picked up to 1.5% in September, its highest rate since October 2014, though core inflation dipped to 2.2%

China’s economy grew by 6.7% year-on-year in Q3 2016, the same as in Q2 and bang in the middle of the authorities’ target range for full -year growth of 6.5% to 7%

Data due today include the latest labour market report in the UK, construction output in the Euro Area,  and the Fed’s Beige Book in the US