Decision time

Today's news headlines: 

‘Will the bond market sell-off push the ECB to step up stimulus?’. The European Central Bank has been met with pressure to step up its bond purchases to combat the rise in bond yields. Executive board member Fabio Panetta has voiced concern over the tightening of financing conditions and the headwind this could create on the Eurozone’s path out of the pandemic. €1tn remains in the Pandemic Emergency Purchase Programme, so there's room to control the bond market if yields were to continue to move higher in the coming weeks. (Financial Times) 

‘England’s £23bn Test and Trace programme condemned by MPs’. Although the vaccine programme is performing well, the government's initial response to the pandemic is now under scrutiny. The aim of the Test and Trace programme was to limit the need for national lockdowns. However, with the country now deep into its third lockdown, the system does not seem to have delivered, despite £23bn spent to date. MPs are now calling on the government to scale back the use of high-paid consultants in the programme, with pay ranging between £1000 and £6000 a day. (Financial Times) 

Today's events, rates, and data 

  • Overnight, Asian markets were buoyed as a rally in the Nasdaq and S&P 500 lifted market sentiment. The US Dollar index has held stable while other major currencies appear flat this morning. News surrounding the recent oil supply attacks in Saudi has settled, which disturbed oil’s move higher this morning. 

Today's events

China CPI y/y: -0.2% vs -0.3% last month
China PPI y/y: 1.7% vs 0.3% last month
US CPI and Core CPI m/m: 1:30 pm
Canada BOC Rate Statement: 3:00 pm
US Crude Oil Inventories: 3:30 pm
US 10-year Bond Auction: 6:00 pm

Interbank rates

GBP/USD – 1.3870
GBP/EUR – 1.1675
EUR/USD – 1.1879
USD/CAD – 1.2667

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