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(Almost) all about Brexit

The surprise winner

Just about everybody with an axe to grind was at it yesterday. The US president was complaining about rising interest rates, investors were complaining about Italy's deficit budget, the IMF was complaining about Trump's trade war and the various factions in the Great Brexit Debate were complaining about one another.

For once, it was sterling that came away with the best result among the major currencies. It was not the outright winner: the Kiwi dollar was up there too and both of them were beaten by the resurgent South African rand but against its peer group the pound added an average of 0.4%. The gains included half a US cent and two fifths of a euro cent.

The Brexit narrative was by no means coherent. It seemed that the prime minister was under attack from her own troops at the same time as finding support among the opposition. Overall, however, the sense was of Downing Street moving closer to a deal with Brussels. The announcement that Michel Barnier was scheduled to make today will probably not happen but investors believe that its postponement implies a more significant statement in coming days.

The usual suspects

Away from Brexit, it was mostly a case of the usual noises from the usual places. Even in South Africa there was a feeling of déjà vu when the appointment of a new finance minister sent the rand north.  

Investors are notoriously sensitive about South African finance ministers.  When president Zuma sacked Pravin Gordhan in March last year the rand took a 6% hit, from which it has never recovered. The resignation of Nhlanhla Nene was less hurtful to the rand but his replacement yesterday by Tito Mboweni was worth a quick 1.6% to the currency. Mr Mboweni has proper street cred, having been governor of the South African Reserve Bank.

It was business as usual in Washington, where Trump was complaining about the pace of tightening by the Federal Reserve. In London Bank of England deputy governor Ben Broadbent was trying to persuade parliament to do away with redundant inflation indices, especially the retail price index, to which the Bank has an especially severe aversion. 

Output and trade

After two days of not very much from the statisticians today's agenda has rather more meat to it. For sterling it all happens at half past nine, with the data for UK industrial and manufacturing production, the trade deficit and gross domestic product for August. GDP growth is forecast to have slowed to a monthly 0.1% following a 0.3% expansion in July.

Norwegian inflation at seven this morning was above forecast, with a headline rate of 3.4% which sent the krone higher. The US figures this afternoon cover producer prices and wholesale inventories and Canada reports on building permits. There are speeches today from the Old Lady, the Fed and the Reserve Bank of Australia.

GBP ahead on Brexit optimism

GBP ahead on Brexit optimism

ZAR rebounds on Mboweni appointment

ZAR rebounds on Mboweni appointment

NOK higher on inflation numbers

NOK higher on inflation numbers

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