Sterling firmer

Sterling is on the front foot this morning having strengthened to $1.39 against the dollar – its highest level since early 2018 – and to not far shy of 87p against the euro. The latter regained some more ground against the US currency last week and kicks off this week at around $1.2150, which is the middle of its trading range of about $1.1950 to $1.2350 in 2021 to date

Equity markets rose over the course of last week with US indices closing at new all-time highs on Friday, while core bond yields also nudged up over the week with US 10-year yields finishing at 1.21% and equivalent German yields trading at -0.40% at the start of play today

More than 15 million people in the UK have had their first coronavirus vaccine, which has been described by Prime Minister Boris Johnson as a “significant milestone” (and is probably also the explanation for the pound’s latest advance) though he is now likely to come under pressure from some in his own party to ease restrictions

Mario Draghi has been installed as the new Prime Minister of Italy having received the support of Parliament over the weekend. The country’s borrowing costs have fallen lately with 10-year bond yields hitting a record low of 0.47% late last week

Data due this week includes Euro Area GDP and employment (both for Q4 2020); UK CPI inflation and retail sales on Wednesday and Friday; retail sales in the US on Wednesday; and flash PMIs for February in the main economies on Friday