Plenty to doubt
It might not be a universal truth but the view on Monday seemed to be "if in doubt, do nothing". There was certainly plenty to doubt, and plenty of nothing going on. Sterling was on average unchanged and only 0.6% separated the leading Swiss franc from the lagging Swedish krona.
Coming up later this week are monetary policy decisions from the Swiss National Bank, the European Central Bank and the US Federal Reserve as well as a speech by Bank of Canada governor Stephen Poloz. There either will or will not be a phase one trade agreement between Washington and Beijing, which should determine whether or not the US administration imposes new tariffs on Chinese goods at the weekend. Then there is the small matter of the UK general election on Thursday. Anyone who cannot find uncertainty among that lot has no imagination.
Sterling held onto the gains it has made since the election was called at the end of October but made no further progress. While the opinion polls continue to indicate a Conservative majority, there are doubts. An expert study by the London School of Economics suggests that the result will be tighter than generally anticipated, perhaps with no overall majority.
In search of inspiration
To exacerbate the doubts, there was almost a total lack of statistical inspiration for investors on Monday. During London's day, the "highlights" were Canadian housing starts and the Sentix measure of Euroland investor confidence. A few Australian ecostats and Chinese inflation (4.5%) overnight did not really enhance the picture.
For the first time in eight months, the Sentix index of euro zone investor confidence turned positive, rising from -4.5 to +0.74 and beating analysts' predictions that it would fester at -4.9. The news did nothing for the euro, which is just about unchanged on the day against the US, Canadian and NZ dollars, the Japanese yen and the British pound.
Canadian housing starts and building permits were less buoyant than forecast. RBC expects house-building to remain firm through the turn of the year. There was no reaction from the Loonie.
UK output, German confidence
This morning's UK data for manufacturing and industrial production and the balance of trade are theoretically important but will probably be overshadowed by the general election narrative. The euro will have a second look at investor confidence, this time from ZEW.
Early today Australia reported that house prices rose 2.4% in the third quarter, slowing their annual decline from 7.4% to 3.7%. The data indicate that prices are heading back towards their 2017 peak. NAB's Monthly Business Survey found that Australian business conditions "have stabilised at low levels, after declining significantly between mid-2018 and 2019". The Aussie reacted positively but is still a third of a cent lower on the day.
Other than this morning's UK and EU data, the agenda for Tuesday is another thin one. US small business confidence and nonfarm productivity will probably not move the dial and the same is likely to be true of NZ electronic card retail sales and Australian consumer confidence tonight.