Despite an almost complete lack of UK economic data, the last few days were not without incident for sterling. Thursday's commentary from the Bank of England made its life difficult and so, in theory, did negative vibes from a rating agency. Despite this, the pound traded a little higher when it opened in the Far East this morning.
As expected, the Bank of England kept its bank rate steady at 0.75%. However, the minutes showed a 7-2 voting split, with two members preferring a rate cut. That was taken as a negative for sterling. And so was the bank's Monetary Policy Report (the rebranded Inflation Report), which contained a downgraded growth forecast based on the latest withdrawal agreement.
At the end of the week, Moody's, a credit rating firm, changed its outlook for Britain from stable to negative. At the moment, Moody's has the UK at Aa1, two notches below the top-level Aaa and in line with the assessments of S&P and Fitch. Moody's cited "paralysis in policy-making" as a result of Brexit and "no clear plan" to finance the spending promises in the election campaign. Nevertheless, sterling began the week looking perky. On Friday, it lost out only to the Japanese yen, and from Thursday morning's levels it is down by an average of 0.2%.
Watching the forecasts
As Britain prepared for its third general election in four years, Spain was holding its fourth in the same period and the second this year alone. The result, yet again, was inconclusive. Investors are apparently inured - perhaps as a result of Brexit - to political gridlock in Europe, for the euro was unmoved by the result.
Investors are appearing not so immune to economic forecasts. The BoE report demonstrated that, as did Thursday's "Update on economic and monetary developments" from the European Central Bank. It confirmed "protracted weakness in euro area growth dynamics" and reiterated the bank's readiness "to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim".
The most notable data at the end of last week were Canada's employment figures. The strong 4.4% growth in wages was decent enough but the loss of 1,800 jobs in October was a far cry from the predicted 16k increase.
Britain rather monopolises today's ecostat agenda. There are figures for third quarter gross domestic product, production and the balance of trade. For good measure, the NIESR also provides its estimate of growth in the three months to November. America takes the day off for Veterans' Day.
Some startling numbers from China over the weekend showed inflation jumping from 3.3% to 3.8%. The rise was chiefly driven by pork prices, which were up 101% on the year as a result of an outbreak of African swine fever.
UK manufacturing and industrial production are expected to have fallen slightly in September, leaving them both around 1.25% lower on the year. Britain's trade deficit is supposed to have widened in the same month. After a 0.2% decline in the second quarter, GDP is believed to have rebounded 0.3% in Q3.