Sterling nudges higher

Sterling is nudging higher against the euro as it continues to recover from the low of over 87p it reached early last week, and at 85.75p this morning is trading at its strongest level in around a month. It has also firmed against the dollar, to around $1.32

The dollar is a touch stronger against the euro – at just below $1.13 – helped by yesterday’s much stronger than expected new homes sales in the US. The latter rose by 12.4% in July from June and were up some 31% on July 2015 (though they are still running around 50% below their peak all the way back in 2005)

European equity markets advanced by around 1% yesterday while US stocks ended marginally higher. Core government bond markets were very subdued with yields little changed on the day.

The composite PMI for the Euro area inched up to 53.3 in July according to the ‘flash’ reading, consistent with on-going but still moderate economic growth

Data due today include existing homes sales in the US