Sterling a little firmer

Sterling is a touch firmer against both the euro and the dollar this morning, amid some talk that a deal between the UK and the EU might be in sight, trading just under 89.5p and at almost $1.33 respectively, while the single currency has also gained some ground against the dollar and is now knocking on the door of $1.19

Equity markets took a breather yesterday following recent gains with both European and US stocks ending a little lower on the day. Meanwhile, core bond yields nudged down again with US 10-yields falling by around 5bps to under 0.85%

Bloomberg is reporting that officials in the UK-EU talks are planning for the possibility of a breakthrough to be announced as soon as next Monday, although no precise day has been settled on, according to people said to be familiar with the discussions, but they are also warning that there was still the potential for the negotiations to collapse

Retail sales in the US rose for a sixth month in a row in October although the pace of growth slowed to 0.3%, which is well down on the monthly growth rates recorded over the July-September period

Federal Reserve Chair Powell says recent progress on finding a vaccine was good news in the medium-term but the US economy still has a “long way to go” before it fully recovers from the pandemic, reiterating that the central bank is “strongly committed to using all (policy) tools” as necessary

Data due today includes CPI inflation in the Euro Area and housing starts and building permits in the US