Today’s news headlines:

‘European economy lags China and US on pandemic recovery’. The International Monetary Fund released new growth forecasts yesterday, predicting that Europe is to stumble out of the pandemic at a much slower rate than China or the US. This is largely a consequence of the limited effectiveness of restrictions in curbing the spread of coronavirus, in addition to the slow pace of vaccine rollout in most EU member states. The continent already faces the prospect of a double dip recession, crisis in Italy and unease over the future German political leader, all causing some analysts to speculate that Europe’s recovery will lag, much like the post-global financial crisis era. (Bloomberg)

‘UK job losses slow as furlough scheme helps limit unemployment rise’. Yesterday’s UK Labour market data pointed to resilience in the employment sector, with job losses slowing in November despite increased coronavirus restrictions. Unemployment may have risen to 5% in the three months to November, but weekly data suggested that most of the rise came in the months of September and October, before Chancellor of the Exchequer Rishi Sunak decided to extend the furlough scheme. Economists at JPMorgan commented that the scheme has ‘set the UK up for a strong recovery if economic restrictions can be substantially lifted in the spring’. (Financial Times)

Today's events, rates, and data 

• Risk appetite looks to have taken a brief pause overnight, following some worrying virus trends and little progress on the US fiscal stimulus bill, with investors awaiting today’s conclusion of the most recent Federal Reserve policy meeting.

Today's events

Aussie CPI: 0.9% vs 1.6% previously
German Gfk Consumer Climate: -15.6 vs -7.5 previously
US Durable and Core Durable Goods Orders: 1.30pm
FOMC Statement: 7.00pm
US Fed Funds Rate: 7.00pm
FOMC Press Conference: 7.30pm

Interbank rates

GBP/USD: 1.3750
GBP/EUR: 1.1310
EUR/USD: 1.2155
USD/CAD: 1.2720