ECB's Lagarde: We are not seeing transmission from wages to inflation yet
- Upward move in inflation is really minor
- Downside risks are less pronounced due to trade deals
Pretty much a repeat of her remarks offered during the ECB press conference yesterday. So far, we're not hearing of anything that stands out from the panel discussion.
WHO spokesman: It is still too early to draw conclusions on how severe the coronavirus is
The risk picture is more mixed as bonds see fresh bids
While European equities are posting more solid gains and US futures are up by ~0.2%, bond yields have fallen off in the past hour of trading with Treasury yields back at flat levels after having been about ~3 bps higher following euro area PMI data earlier.
EUR/USD falls to lowest since 2 December as dollar keeps more firm on the session
EUR/USD is falling below support around 1.1040 now as price hits a session low of 1.3032 - the lowest level since 2 December, more than seven weeks ago.
Cable falls below 1.31 as UK PMI data beat fails to inspire
The pound is falling to its lowest levels on the day with cable slipping back below the 1.3100 handle currently - dollar bids also pushing the issue a bit.
BOE rate cut odds for next week pretty much a coin flip
The UK PMI data beat earlier failed to tip the scales significantly and I reckon that is something that won't do the pound much favours ahead of the BOE meeting next week.
ECB's Rehn: Inflation expectations have become stuck at a low level
- This is something that the governing council discusses incessantly
- This is at the core of the strategy review, we want to make sense of it
Pound whipsaws as traders digest UK PMI data beat
Pound traders are not looking too impressed by the UK PMI data beat earlier, as the currency is struggling to build further gains despite the better-than-expected release.
UK January flash manufacturing PMI 49.8 vs 48.8 expected
- Services PMI 52.9 vs 51.1 expected
- Composite PMI 52.4 vs 50.7 expected
- Prior 49.3
Pound keeps a little higher ahead of PMI data release
A break above the recent swing highs above the 1.3150 will clear out some resistance for cable in searching for a move higher, but it is all about the PMI data for the pound now.