Subdued start to the week

The euro gained a little on sterling yesterday getting up to 0.895p, the highest since early January, and the 90p level is looming into sight. It was fairly quiet overall, with the single currency largely unchanged against the dollar at $1.12. Equities started the week up marginally, led by an improved tech stocks performance, while sovereign fixed income markets were subdued as 10-year yields in core Europe, the US and the UK finished more or less flat for the day

This unhurried start to the week could be the calm before volatility later on with Draghi and others speaking at the Sintra forum today, the Fed meeting ending tomorrow, a BoE meeting on Thursday and the likelihood of Boris Johnson being odds on favourite to be the next UK prime minister in the next few days

Not much by way of data yesterday, euro area labour costs rose 2.4% year-on-year in Q1, earnings are growing across the zone but little sign of any feed through to inflation. In the US, empire manufacturing was very weak in June. The manufacturing sentiment index for New York fell to -8.6 from 17.8. Slightly better industrial production data last Friday had spurred hopes that the manufacturing sector in the US was doing a little better so this was an unwelcome surprise, and a sign that the tariff war is having a negative impact

Data due today includes final May inflation data for the EU, ZEW survey in Germany and housing starts in the US. ECB President Draghi is due to give a speech this morning in Sintra before joining BoE Governor Carney for a panel discussion this afternoon