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Pretending not to care

Not panicking

In view of all that came economically or politically unstuck at the end of last week it is a surprise - even a relief - that currency reaction has been relatively muted. The safe-havens are not through the roof and sterling is unchanged against the euro and the US dollar.

The poor performance of US taxi firm Uber at its stock market launch, and its knock-on effect with other investment vehicles was not enough to unnerve investors. They took in their stride the news of increased US tariffs on Chinese goods, even after one of the architects of those taxes conceded that they would "hurt both sides". The apparent stalemate in talks between Washington and Beijing is as yet seen only as a theoretical negative for US equities: the DJ30 index is unchanged from its position on Friday morning (but 4% lower on the month to date).

That calm is unlikely to survive if - when - China reveals its countermeasures. For now, though, there is no sign of investors running for cover or abandoning "risky" commodity-related currencies. The Swiss franc and the Canadian dollar are both 0.3% higher on the day against sterling while the Japanese yen and Australian dollar are 0.2% softer.

Turning a blind eye

If investors were indifferent to the potentially negative consequences of deteriorating global trade relations they also turned a blind eye to what, by most measures, were good UK economic data on Friday. Almost every component beat forecast and sterling did not budge.

UK gross domestic product expanded by a provisional 0.5% in the first quarter and growth for the year to March was 1.8%. Those numbers were in line with forecast but the 0.5% quarterly rise in business investment was vastly superior to the expected 0.5% decline. Manufacturing and industrial production were both stronger than expected in March and the trade deficit was narrower. Sadly for sterling, nobody really noticed; most were more concerned about what was not happening with Brexit.

There was a similar lack of interest in the US consumer price index data.  Headline inflation edged up to 2.0% in April and core inflation - excluding food and energy - was up from 2.0% to 2.1%. Investors paid rather more attention to the Canadian jobs numbers. The 106.5k increase in payrolls was an order of magnitude better than expected and unemployment fell close to a 40-year low at 5.7%. The Loonie reacted positively, booking a half-cent rise for the day.

Central bankers

Those seeking inspiration from today's agenda will be disappointed. There are no European or American ecostats on the list. The Australian and Norwegian data have come and gone and the next statistics do not appear until tonight.

Australian mortgage lending fell even more than expected in March.  Norway's GDP expanded by a provisional 0.3% in Q1. NZ visitor numbers are next to appear, tonight.

Three central bankers have speaking engagements: Guy Debelle from the Reserve Bank of Australia, Eric Rosengren and vice chairman Richard Clarida from the Federal Reserve and Timothy Lane from the Bank of Canada. Let's hope one of them says something interesting.

GBP: Good data earn no new support

GBP: Good data earn no new support

USD: Unaffected by trade talks failure

USD: Unaffected by trade talks failure

AUD: Flat against safe-haven JPY

AUD: Flat against safe-haven JPY

CAD: Unchanged against safe-haven CHF

CAD: Unchanged against safe-haven CHF

EUR: Steady against GBP and USD

EUR: Steady against GBP and USD

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