21 become 3
It has been an exciting start to the new Brexit season. On two days in succession backbench MPs have defeated the government. Now, all eyes are on the final, which takes place in Westminster next Tuesday. It could well go to a replay.
Parliament pushed through a Brexit process amendment that would oblige the prime minister to come back with a Plan B if her withdrawal bill were to be defeated in the Commons next week. The purpose of the amendment was to prevent Theresa May playing for time and forcing Parliament into a binary choice between her deal and no deal.
Where investors had cautiously welcomed the previous day's anti-no-deal amendment, they were less enthusiastic about the imposition of the 3-day rule. Although it does speed up the process - until yesterday the PM would have had three weeks to deliver her re-think - it also speeds up the uncertainty. And for that, investors were not grateful. Sterling had another difficult day, falling by an average of 0.2% and losing ground to all but the US dollar.
It was not only Brexit that preyed on investors' minds. Concern grew about the economic effect of the US government shutdown, the Bank of Canada failed to galvanise enthusiasm for the Loonie and Fed chiefs piled on the dovishness.
The US president walked out of a meeting with Democrat leaders when they refused to cave in to his demand for Mexican Wall funding. From being a theoretical problem for federal employees, the situation is now becoming real as wages go unpaid. In Ottawa, as expected, the Bank of Canada kept its benchmark rate steady at 1.75% and confirmed that "the policy interest rate will need to rise over time into a neutral range". However, the governor played down any idea of urgency. In the States the minutes of the Federal Open Market Committee underlined the comments made recently by Fed bosses. Several members thought the committee "could afford to be patient" in making its next move.
It was the US dollar that suffered most, losing half a cent to sterling and one cent to the euro. The Loonie was in the penultimate slot, also down by half a cent to the pound. The euro shared first place with the safe-haven yen and franc, all of them strengthening by 0.5%.
Numbers and words
An avalanche of ecostats today and on Friday comprises mainly second- and third-tier statistics. For sterling the important ones will be tomorrow's figures for production and trade. This evening brings a veritable gabfest of Fed leaders; four are scheduled to speak, including chairman Powell.
Inflation figures have already been released by China and Norway. In China the headline rate slowed from 2.2% to 1.9%; in Norway it was steady at 3.5%. The remainder of today's data are of only relatively minor domestic importance. It will be Jerome Powell's appearance that attracts the most attention.
Tomorrow's two main themes will be Britain's economy and American inflation. UK manufacturing and industrial production are pencilled in for modest increases and US inflation is forecast to be unchanged at 2.2%.