Today's news headlines: 

‘UK should use budget to phase out furlough scheme, think-tank advises’. The Institute for Fiscal Studies warned that the UK economy would not be able to adjust to the ‘new normal’ until emergency support was removed. The think-tank said that most support measures should be phased out gradually and called for Chancellor of the Exchequer, Rishi Sunak, to set out these measures in his March 3^rd budget. In a central IFS model, UK borrowing–set to rise to around £400bn in 2020-21–might still be running at around £130bn in 2024-25, more than twice the level forecast in last year’s budget. Paul Johnson, IFS Director, said that Sunak must strike a balance between continual assistance and weaning the economy off blanket support, but that a day of reckoning was coming in the form of big future tax rises. (Financial Times)

‘Biden steps up stimulus pitch in push to seal deal with Congress’. President Biden will pledge his case for a $1.9tn stimulus package directly to the US public today, during his first official trip outside of Washington since becoming President. Biden hopes he can use public opinion to rally lawmakers around his economic agenda, which aims to combat the fallout from Covid-19 with large-scale government spending. Sticking points remain, but Democrats want the bill passed by mid-March when the latest extension of emergency jobless benefits expire. (Financial Times)

Today's events, rates, and data 

• Sterling posted fresh highs against the US Dollar this morning, reaching the 1.3952 interbank level against the Greenback, along with a move higher against the Euro. As sentiment towards the UK economy continues to improve, we should see more traders and investors unwind their positioning against a sharp fall in Sterling. Broader risk sentiment continues to improve, with equity index futures gaining in the US and Europe.

Today's events

China Bank Holiday: All Day
Eurozone Flash Employment Change: 10.00am
Eurozone Flash GDP: 10.00am
Eurozone ZEW Economic Sentiment: 10.00am
German ZEW Economic Sentiment: 10.00am
US Empire State Manufacturing Index: 1.30pm
FOMC Member Bowman Speaks: 4.10pm
FOMC Member Daly Speaks: 8.00pm

Interbank rates

GBP/USD: 1.3915
GBP/EUR: 1.1470
EUR/USD: 1.2130
USD/CAD: 1.2640