Some respite for stocks

There was some respite for stocks at the start of the week, with both European and US indices closing modestly higher yesterday, while bond yields in the core markets edged a little higher. Amidst this, the euro was little changed on the day against the dollar and trades this morning at around $1.1050, while the pound fell against both the single currency and the dollar, to over 85p and sub $1.30 respectively, after Boris Johnson said the UK is seeking a free trade agreement with the EU but is prepared to conduct trade under WTO rules if necessary

Equity markets in Asia have steadied overnight, having sold off further in the previous trading session, which is spilling over into a positive open for European stocks this morning

There was some relief for the manufacturing sector in the US in January according to the Institute of Supply Management’s (ISM) latest survey, with its measure of activity in the sector moving back up above the expansion-contraction of 50 last month led by increases in both output and new orders

In contrast, manufacturing activity in the Euro Area contracted again at the start of 2020 according to the PMI data published yesterday, though the pace of decline did slow in January relative to the previous month, while the equivalent data for the UK suggests activity was stagnant last month

Data due today includes producer prices in the Euro Area; the construction PMI in the UK; and capital goods orders in the US