GBP

The pound has gained some momentum in early trading, despite Brexit concerns resurfacing. Yesterday, Northern Ireland’s Agricultural Minister Edwin Poots said the Democratic Unionist Party won’t allow Northern Ireland’s power sharing government to be revived unless the European Union abandons its requirement for checks on British goods arriving and vowed to fight a Belfast high court interim judgement blocking his order to agricultural inspectors to stop EU required checks at ports. The British Retail Consortium, which represents more than 5000 businesses across the country, said this morning that soaring household prices would mean consumers tightening their purse strings over the coming months, with a knock-on effect on high streets. A Barclaycard survey revealed that consumers had slowed their pace of spending last month.

EUR

The euro has retreated from recent highs, losing around half a cent against the dollar. The single currency’s losses came after European Central Bank President Christine Lagarde, while speaking before the European Parliament, said there is no need for big monetary tightening in the eurozone as inflation is set to fall back and could stabilize around 2%. At last week’s policy meeting, the ECB pointed to mounting inflation risks which opened the door to an interest rate hike later this year and said their March meeting would be crucial in deciding how quickly they would wind down its long running bond buying scheme. However, Lagarde appeared more cautious on Monday, arguing that inflation is unlikely to get entrenched.

USD

The benchmark 10-year US treasury yield continued to rise towards the key 2% mark in early trading, helping the dollar to gain support against its major rivals. With the economic calendar light today, the greenback’s valuation is likely to be impacted by treasury bond yields and geopolitical concerns which eased this morning when Russian president Vladimir Putin promised not to carry out new military initiatives near Ukraine for the time being as a precursor to possible de-escalation. According to a French official, after Putin held talks with Frances President Macron, the Russian leader also agreed to withdraw troops taking part in military exercises on Belarusian territory near Ukraine’s borders once they have finished.

Economic Calendar

13:30pm USD US Goods and Services Trade Balance (DEC)