Sterling steadier

Sterling is steadier this morning, having fluctuated quite a bit over the past couple of days. It is trading just above 88p against the euro this morning, and at around $1.3350 against the dollar. Meanwhile, the euro, at a little below $1.18 against the dollar, continues to trade well within the range of $1.15 to $1.21 that has prevailed over the past three months or so

UK government bond yields fell yesterday, more than reversing the spike higher that occurred on Friday on the news that agreement had been reached in Phase 1 of the Brexit talks, with 10-year yields ending the day around 8bps lower at 1.20%

Theresa May has briefed parliament on the agreement reached last Friday . On a transition period, she said the ‘general expectation is that it will be agreed’; she said she’d like that to be ‘as early as possible in the new year’, and noted that Michel Barnier [the EU’s chief Brexit negotiator] has indicated it could be during the first quarter

The US treasury says tax cuts could almost pay for themselves through stronger economic growth, which it says could reach close to 3% a year over time; some though, like outgoing Fed chair, Janet Yellen, worry about the impact of tax cuts on the budge deficit and the country’s debt.

Data due today include CPI inflation in the UK. The headline rate is expected to stay at 3% for a third consecutive month in November, according to the consensus forecast, with the core (or underlying) rate of inflation also expected to remain steady, at 2.7%