Cause every little thing gonna be alright
There was a decidedly upbeat mood when financial markets in the Far East welcomed the new week and the new month. The purchasing managers' index readings released by China on Sunday morning had been stronger than expected, leading to optimism that the downturn there might be over.
Most emerging market and commodity-related currencies gapped higher at the open and the risk-on rally was reinforced when China's Caixin/Markit PMI came in this morning a point above forecast at 50.8. Doing its usual balancing act, the safe-haven Japanese yen fell out of favour and it shares last place for the day with sterling.
In recent months Beijing has introduced or extended trillions of pounds of stimulus measures, such as a more relaxed monetary policy, infrastructure investment and tax cuts. Those efforts now seem to be having an effect, though many analysts warn that one swallow does not make a summer. Even so, the notoriously "risky" South African rand is enjoying its second consecutive day at the front of the field, 1.7% ahead of the pound, while the Australian, Canadian and NZ dollars are up by between a cent and a cent and a half.
Keeping up with the yen
The most charitable thing to be said about sterling is that it kept pace with the Japanese yen over the weekend. That still leaves it an average of 0.5% lower on the day against the other majors. It is down by 1.3% from Thursday morning's position and 1.1% lower on the week. In last place.
It is not difficult to guess where the problem lies. Grumpy MPs defeated the prime minister's EU withdrawal bill for a third time, on this occasion by 58 votes, when their long weekend was cut short in order to hold an unusual Friday session in the Commons. The weekend media were teeming with talk of general elections, no-deal Brexits, new prime ministers, confirmatory votes, Norway-style deals, customs unions and all manner of schemes that have already been rejected by parliament, the prime minister or the EU.
This afternoon parliament will have another shot at finding a consensus on what it can, rather than what it cannot accept. The speaker will select some or all of eight proposals on the order paper. The hope is that MPs can come up with something that does not offend a majority of the house and, if so, that Downing Street will not veto it.
Although the Chinese manufacturing PMI results were higher on the month, that is not likely to be the case with most of the numbers from Europe and North America. Other important data cover Euroland inflation and US retail sales. Australian interest rates are expected to be unchanged tonight.
Britain's manufacturing PMI is pencilled in at 51.3, which would put it ahead of Euroland but a point or more behind the States and Canada. Euro zone inflation should be a shoo-in at 1.5% and analysts expect US retail sales to have increased by 0.3% in February.
The implications for sterling of this evening's parliamentary votes have been so well rehearsed in this column that it would be patronising to reiterate them at this stage. The real question is whether things will be any different tomorrow.