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Good news for some

Two out of three ain't bad

Having lost out by two thirds of a cent to the US dollar on Wednesday, sterling was the comfortable winner on Thursday and Friday. It is up by an average of 2.2% on the week and 1.3% on the month. The pound's success is the result of greater optimism that a Brexit deal will be forthcoming.

The prime minister helped set the tone with her speech on Wednesday. It put a spoke in the wheels of those in her party who would prefer to see an extremist Brexiteer in Number 10. Whilst Mrs May's survival in office by no means guarantees an agreement with the EU - she repeated the mantra that no deal is better than a bad deal - investors believe it reduces the chance of a cliff-edge departure.

Sterling's next appointment with fate comes on Wednesday, when EC president Jean-Claude Juncker is supposed to reveal the sort of Brexit deal that is favoured by Brussels. Although it will probably look a lot like the one floated ages ago by Donald Tusk, another EC president, investors were optimistic at the end of last week that it would receive serious consideration by Theresa May.

Jobs for the boys

It was a great week, a really great week, so great, for the US president. Not only did he get his pick onto the supreme court, despite heated opposition, he also presided over the lowest rate of unemployment since 1969. Investors were not particularly impressed.

Although US unemployment did indeed fall to a 49-year low, the 134k monthly increase in nonfarm payrolls was well short of the forecast 185k rise. Investors did not care that, with revisions to earlier months, the total number of workers was 36k more than expected (149.5m in fact): the headline number was not up to snuff and that was that. The dollar lost a cent to sterling.

Jair Bolsonaro is also about to land a new job. In the first round of Brazil's presidential election yesterday the right-winger's 46% of the vote left the Workers' Party's Fernando Haddad well behind with 29%. Mr Bolsonaro is seen as the candidate most likely to support business and the economy. The Brazilian real is little changed on the day but it may start to move when America opens. 

Columbus day

The US bond market will be closed today in memory of Christopher Columbus, the sailor who didn't discover America and wasn't called Christopher Columbus. There are also holidays in Canada and Japan. All but one of the ecostats have already come and gone.

China's Caixin services sector purchasing managers' index came in a point and a half higher at 53.1. Australian job adverts were down by a monthly 0.8%. Swiss unemployment was unchanged at 2.5%. German industrial production was down by 0.3% in August.  

The BRC's UK retail sales measure comes out at midnight. Beware of a possible correction to sterling after three strong days.  

Setting the tone

Setting the tone

Great week for some

Great week for some

Boiling over in Brazil

Boiling over in Brazil

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Weekly roundup

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