Today's news headlines: 

‘Johnson says Covid public inquiry to start within a year’. As the UK finds its way almost out of restrictions and back to normality, attention is turning towards how well the pandemic was handled. Dominic Cummings, former chief adviser to Boris Johnson, will be due to give evidence to the inquiry and it is expected he will be critical of the slow implementation of lockdown measures in March and November. Other themes expected to be addressed are the track and trace system, the deployment of PPE and the vaccine rollout that is currently underway. (Financial Times)

‘Fed governor plays down inflation risks as “transitory surge”’. Higher energy prices and supply chain difficulties have created greater inflation concern. Investors believe with the monetary stimulus currently in the market and economies beginning to re-open that price rises could be much more pronounced in the coming months. Federal Reserve Governor, Lael Brainard, has attempted to provide reassurance that these supply chain issues will smoothen and that any spike in inflation is transitory. It was also emphasised that monetary support will not be withdrawn until full employment and a 2% inflation target are met. (Financial Times)

Today's events, rates, and data 

• Markets continued to drift lower on Tuesday, with the S&P 500 down 0.87% and the Dow Jones 1.36% weaker. The FTSE 100 ended 2.47% lower as markets battled with fresh inflation concerns. US CPI data due out later today could calm markets or add fuel to the fire. Cable continues to hold around $1.40 despite the risk off mood.

Today's events

UK Preliminary GDP q/q: -1.5% vs 1.3% previously
EU Economic Forecasts: 10:00am
Bank of England Governor Andrew Bailey Speaks: 10:00am
US CPI and Core CPI m/m: 1:30pm
FOMC Member Richard Clarida Speaks: 2:00pm
FOMC Member Raphael Bostic Speaks: 6:00pm

Interbank rates

GBP/USD: 1.4133
GBP/EUR: 1.1649
EUR/USD: 1.2134
USD/CAD: 1.2106

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