Today's news headlines:

‘Peripheral spreads in little distress may embolden ECB hawk case’. Bond yields in weaker economies across the Eurozone are yet to deteriorate at the rate markets, and the ECB, thought just last summer. The unanticipated strength of the European economy has fed through to resilience in the debt market, which is playing into the hands of those more hawkish members at the ECB. The headline interest rate now looks set to peak at 3.75% as policymakers seemingly have more favourable conditions to continue their hiking cycle. (Bloomberg) 

‘BOJ watchers flag outside risk of March surprise to help Ueda’. Governor Haruhiko Kuroda is set to leave the Bank of Japan this April, and markets are starting to price in one more surprise before his departure. A widening of the current yield band is one possibility that analysts are exploring, arguing that it would give the incoming Kazuo Ueda more time to assess the current policy environment and then implement his own strategic plan, albeit a more dovish one. Implied volatility on the Yen is already rising for the meeting scheduled on March 10th as traders anticipate action. (Bloomberg) 

Today

European shares climbed in early trading while US equity futures declined as markets struggle for direction and tensions between the US and China linger. The Dollar is trading flat on the day so far, while UK gilt yields fall this morning. Elsewhere, energy prices have clocked higher on hopes of stronger demand from China. 

Events

UK Rightmove HPI MoM (Feb): 0.0% 
Eurozone Consumer Confidence (Feb): 3:00PM
Australia flash Manufacturing PMI (Feb): 10:00PM
Australia flash Services PMI (Feb): 10:00PM
US Bank Holiday: All day
Canada Bank Holiday: All day

Interbank rates*:

GBP/USD – 1.2027
GBP/EUR – 1.1250
EUR/USD – 1.0689
USD/CAD – 1.3470

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*Indicative interbank rates taken on the day of writing. Please speak to your Dealer to find out the current rates available for you.