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Investors welcome sports relief

Much-needed relaxation

The postponement of Article 50 for six months and the Easter parliamentary recess have removed much of the urgency surrounding Brexit. Over the weekend investors were able to sit back and enjoy Wasps' demolition of Exeter and Tiger Woods's much-delayed fifth triumph at the US Masters. Nobody paid much attention to sterling.

Between Thursday's opening and this morning the pound is on average almost unchanged against the other ten most actively-traded currencies. It is 0.7% higher against the Japanese currency and down by 0.4% against the euro. Those are the extremes.  

There were no UK economic data to be seen on Thursday or Friday. The run-up to the weekend revolved mostly around the implications of shifting Brexit to the end of October and the possibility of a leadership change in the Conservative party. Investors are mystified at the idea of a leadership challenge: They cannot imagine how replacing one minority prime minister with another might alter the voting numbers in the Commons or, therefore the Brexit outcome.

Euro to the fore

The euro was top performer on Thursday as well as over the four-day period, more for technical reasons than because of any compellingly wonderful Euroland economic data. The yen took last place on the two individual days and overall. Investors were mostly upbeat and did not feel a need for the safe-haven.

Pan-Euroland ecostats went no further than Friday's industrial production figures. It would be misleading to say they were good: production fell 0.2% in February and was 0.3% lower on the year. However, when investors are expecting poor numbers they tend to react positively when the result is not as bad as feared. Analysts had predicted falls of 0.6% and 1.0% so the euro got a boost. It had already got a leg up overnight, for no obvious reason.  

The US dollar gained ground on Thursday then gave almost all of it back on Friday, such that it is all but unchanged. US producer prices increased more quickly than expected in March and weekly jobless claims were fewer than forecast. Friday's provisional Michigan consumer sentiment index came in more than a point below forecast at 96.9.

Searching for inspiration

Today looks to be something of a statistical desert. UK house prices and the Bank of Canada's Business Outlook Survey are the only two agenda items with any real potential.

Rightmove's index of house asking prices, announced at midnight, was 1.1% higher on the month but 0.1% down from a year ago. The comment was that the "usual spring buoyancy [was] weighed down by Brexit uncertainty". Norway's trade surplus narrowed by 12% in March while Swiss producer and import prices went up by 0.3%.

Some improvement is expected in the New York Fed's manufacturing index but will probably not affect the US dollar. The BoC's business confidence measures might do something to the Loonie but it is not guaranteed. Central bankers making media appearances today include the Federal Reserve's Charles Evans and Eric Rosengren and the Bank of England's Jonathan Haskel.

GBP: Heaves a sigh of relief as Brexit urgency fades

GBP: Heaves a sigh of relief as Brexit urgency fades

EUR: Leads, thanks to data and technical factors

EUR: Leads, thanks to data and technical factors

USD: Unchanged after one day up, one day down

USD: Unchanged after one day up, one day down

JPY: At the back of the field as safe-havens lose out

JPY: At the back of the field as safe-havens lose out

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