EU finance ministers meet today
A 10 square metre canvas painted by Mark Rothko in 1958 is known as Black on Maroon. The uninspiring title is entirely appropriate to the dreary blocks of, yes, black and maroon which are distinguishable from one another only under bright lighting. An enterprising Russian artist took it upon himself yesterday to enliven the dismal tableau. He wrote on a corner of it "Vladimir Umanets, a potential piece of yellowism". Tate Modern is worried that the damage will mean the painting, previously worth tens of millions of pounds, is now only worth tens of millions of pounds.
A similar change in value hit sterling on Friday. It fell against the US and Canadian dollars, the euro, the yen and all three Scandinavian crowns. Even so, a raw average of its ups and downs showed it unchanged on the day. To an extent this was because of three-quarter-cent gains against both the antipodeans but mainly it was because of a -3% decline by the South African rand, which remains under pressure as a result of labour disputes and violence. In the last two months the rand has fallen by -10% against the pound to its weakest level in three and a half years.
The weakness of the rand was just about the only easily-justifiable move on Friday. Nothing much happened during the morning session. The only ecostats were the updated figure for second quarter economic growth in the eurozone, unchanged at -0.2%, and German factory orders, which fell by -4.8% in August. It all kicked off after lunch though, when the US employment data came out. September's 114k increase in non-farm payrolls was close enough to the forecast figure but an upward revision to the previous month's number added 46k jobs to the total and the unemployment rate fell from 8.1% to 7.8%.
Investors' initial reaction was to sell the dollar and the yen, on the assumption that good news for the US economy is good news for the world; there is therefore less to worry about and less need for the safe-haven currencies. But after the first flush of enthusiasm a more traditional notion took hold; strong US labour market = strong US economy = strong dollar. By the end of the London session the dollar was back to its opening levels and it continued to strengthen through the New York close. It moved higher in the Far East this morning too.
Sterling's poor performance stemmed in part from a suspicion that the Monetary Policy Committee (MPC) would plump for more asset purchases next month, also from efforts to test technical support levels on the sterling/euro chart. The jury is still out on the judgment of whether or not those supports have been broken, technical analysis - like economics - being as much an art as a science. Nevertheless, sterling has every reason to be nervous.
It faces no specific challenge today, at least until midnight when the RICS house price balance and the BRC retail sales monitor come out. Elsewhere Switzerland releases its deflation figures and Sentix publishes its Euroland investor confidence measure.
More important than any of those is the meeting of euro area finance ministers in Luxembourg. Greece and Spain will be high on the agenda and every financial markets participant, from Mario Draghi down, will be keen to hear what has been agreed. If anything.