Sterling slips back

Sterling has given up some ground against the euro, slipping back to 89p from an intra-day high yesterday of close to 88p, and has also drifted lower against the dollar, weakening to close to $1.3650 from over $1.37. The single currency, meanwhile, is slightly firmer against the dollar this morning, trading just shy of $1.22

Equity markets in Europe and the US closed flat to very marginally lower yesterday, while core bond yields edged up, to around -0.50% in the case of German 10-year yields and to just over 1.1% for equivalent US yields

Retail sales in the UK rose by 0.3% in December – a smaller increase than the consensus expectation – following a fall of over 4% in November, and were up 2.9% on the same month in 2019

The ECB left policy on hold following yesterday’s meeting, noting that “the renewed surge in coronavirus (COVID-19) infections and the restrictive and prolonged containment measures imposed in many euro area countries are disrupting economic activity”, adding that in this environment continued and “ample monetary stimulus remains essential”

Data due today include flash PMIs for the Euro Area, UK and the US