Slower growth, weaker currencies

The euro and sterling lost a fair bit of ground against the dollar last week, falling to around $1.13 and $1.29 respectively from (intra-week) highs of about $1.15 and $1.31, amid signs of slowing growth in the Euro area and UK economies and downward revisions to the outlook for both. Amid all of this, the euro-sterling rate was largely unchanged at 87.5p

Core bond yields fell quite sharply over the course of the week, particularly in the case of German and UK yields (10-year yields dropped by about 10bps to 0.09% and 1.15% respectively) as the market pushed out the timing of any interest rate hike by the ECB and Bank of England. Meanwhile, equities took a breather after their recent gains with US stocks flat on the week and European indices giving up some ground

UK Prime Minister Theresa May is expected to put a motion before Parliament later this week seeking approval to continue her negotiations with the EU, though MPs are also expected to try and ensure that they get another opportunity to “take control” if a Brexit deal isn’t approved by the end of this month

Today sees the release of Q4 2018 GDP in the UK, with the consensus expecting the quarterly rate of growth to have slowed to 0.3% from 0.6% in the third quarter of last year, while CPI inflation (Wednesday) and retail sales (Friday) are also due this week

Other data due incudes Euro area GDP for the final quarter of 2018 on Thursday (this is the second estimate – the first showed quarterly growth of 0.2% – while there is whole host of central bank officials (from the ECB, Fed, and BOE) scheduled to speak during the week