Sterling still on the front foot

Sterling remains on the front foot as relatively positive news continues to emerge in relation to the Brexit talks. It is trading at 88p this morning, having closed out last week at about 89.5p, and at over $1.3650 against the dollar (from $1.33 last Friday)

There is talk this morning that the EU and the UK are getting closer to agreeing a ‘formula of words’ on the Irish Border issue, following reports yesterday of an agreement on the divorce bill. It’s also being reported that if the EU can conclude at the Council meeting in mid-December that sufficient progress has been made to allow discussions turn to a new trading arrangement, it will pledge to speed up approval for a 2 year transition period the UK is seeking

ECB member Weidmann says the economic outlook in the Euro area is as least as good if not better than previously forecast, suggesting there may be an upgrade to the Bank’s next set of growth projections due next month, and added that a ‘full phasing out’ of QE from September 2018 ‘is warranted’. Data published yesterday showed economic sentiment in the zone rose further in November to its best since level since 2000

Outgoing Fed Chair Janet Yellen says the US economy has strengthened further this year and that further gradual increases in interest rates will be appropriate. Growth in Q3 was revised up in yesterday’s latest GDP release, to 0.8% q-o-q (from 0.7% previously), matching the Q2 outturn

House prices in the UK rose by 0.1% in November, according to the Nationwide index, and the annual rate of increase was 2.5%,  which compares to almost 4.5% in the year to November 2016

Data due today includes inflation in both the Euro area and the US