Today's news headlines: 

‘UK inflation jumps to highest level in 30 years’. UK inflation jumped to its highest level for 30 years in December, reaching 5.4%. This outstripped analysts’ expectations of a 5.2% year-over-year gain as clothing, hotel, and restaurant prices tipped the scale. Wages continue to lag inflation, with annual wage growth at a rate of just 3.8% in December. These developments are likely to fuel expectations of another interest rate hike by the Bank of England in February. (Financial Times)

‘EU uncertain over trigger for sanctions if Russia acts against Ukraine’. The cyberattack on Ukraine's government has brought into question whether Europe and the US will begin to impose sanctions on the main culprit, Russia. There’s debate on what constitutes an attack, with hybrid attacks not meeting the threshold and only full-scale invasions being considered sanctionable according to some countries in the European Union. Top EU diplomats are assessing restrictive measures after some successful informal talks last week. (Financial Times)

Today

Asian indices closed lower overnight after a weak showing on Wall Street amid rising Treasury yields. The US 10-year is approaching 1.90%, and the German 10-year yield hit its highest level for two years this morning. Oil prices remain elevated while major currency pairs have had a quiet start to trade.

Events

UK Consumer Price Index y/y (Dec): 5.4% (est. 5.2%)
Canada CPI m/m: 1:30PM
US Housing Starts: 1:30PM
Bank of England Governor Andrew Bailey speaks: 2:15PM

Interbank rates:

GBP/USD – 1.3594
GBP/EUR – 1.1995
EUR/USD – 1.1333
USD/CAD – 1.2511

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