Some respite for markets

Political developments in the US drove markets last week, though there was some further respite for equities on Friday with US stocks recovering ground for a second day in a row (albeit still ending lower on the week overall)

US bond yields also arrested their decline at the end of the week, though they too still finished down on the week (by the best part of 10bps in the case of 10-year yields). US yields also fell relative to German yields, which in turn was reflected in exchange rate developments

The euro advanced steadily against the dollar over the week, trading up to a high of over $1.12 at one point on Friday before easing back a little. A chorus of ECB voices highlighting the improving outlook for the Euro area economy also provided some for the single currency

Sterling lost ground to the euro last week and is a touch softer again this morning at over 86p. Comments by  Brexit Secretary Davis warning that that the UK could ‘walk away’ from exit negotiations is weighing on the currency

Brent crude oil prices have rebounded to almost $54 per barrel ahead of this week’s OPEC meeting, which is expected to approve an extension of production cuts into 2018

Data due this week include flash PMIs in the Euro area (Tuesday); second estimates of 1st quarter GDP in the UK (Thursday) and the US (Friday); and at home, the Quarterly National Household Survey for Q1 is published tomorrow