What to watch

With yesterday's glut of central bank meetings, the biggest scheduled risk events in developed markets for 2021 are now out of the way. Although there are still some notable data releases, liquidity already seems to be thinning a little in the run-up to the holiday season.

• Cored fixed income has drifted higher through the overnight session, with equities under pressure in a rather risk-off session. On the open this morning we have seen the short sterling and Euribor strips drift marginally higher. A 70% probability of a February hike is still being priced into UK money markets, however, with a hike fully priced by March, another hike by May over 90% priced. Three hikes are fully priced by August. The Eurodollar strip is little changed on the day.
• Overnight, there was more bad news for UK PM Boris Johnson as the Conservatives lost the by-election in the traditional Tory stronghold of North Shropshire. This isn't likely to have an imminent impact on markets at present, but is likely to pile more pressure on the PM who is still trying to contain the fallout from last year's lockdown Christmas party.
• Looking ahead today we have the German IFO (which is unlikely to be too market moving) as well as the final print of Eurozone CPI. We also have the last EGB issuance of the year (a Belgian ORI operation).