Daily Brief

Daily Brief

See recent articles

Dog days

Italian politics, again

Alongside the Swiss franc, sterling was the top-performing major currency on Tuesday. But only close examination reveals that to be so. It seems that Monday's tedium might not have been a one-off, but a sign that financial markets have sailed into the summer doldrums. 

The event that might have upset the applecart was the resignation of Italy's prime minister (the tenth this century) Giuseppe Conte, not so much a political leader as a referee between Matteo Salvini's Lega party and Luigi DiMaio's Five Star Movement. His departure did not come as a surprise: Sig. Salvini is ahead in the opinion polls and has been champing at the bit for a general election. It will now be up to President Sergio Mattarella to decide whether or not he gets one.

There were no euro zone economic data to contribute to the debate. Construction output was flat in June, up by 1% from the same month last year, and nobody cared. The euro gave up a seventh of a cent to sterling and is virtually unchanged against the US dollar.

Nie, non, nein

Prime Minister Boris Johnson's letter to European Council President Donald Tusk received a predictable response: the Irish Backstop is a non-negotiable element in any Brexit deal with the EU. Like Sig. Conte's resignation, the EU's rejection of Johnson's recurrent demand came as no surprise to investors.  

The prime minister will doubtless hear a similar story when he visits Angela Merkel in Berlin today and Emmanuel Macron in Paris tomorrow. Investors expect nothing to come of either meeting, nor from the G7 summit conference in Biarritz at the weekend. They are resigned to waiting it out until parliament reconvenes in early September.

Tuesday's single UK ecostat delivered a better-than-expected result. The CBI's Industrial Trends Survey came in at -13 for August, ten points above forecast and 21 higher than the previous month. That is not to say it was a good result: orders were still "below normal", and the CBI report included the familiar mantra that "It's vital that the Government lifts this burden [of uncertainty] by ending the Brexit deadlock". But the outcome was better than expected, and that was enough.

FOMC minutes

The only potential game-changers on today's list are the consumer price index data from Canada and the minutes of the last Federal Open Market Committee meeting. UK public sector borrowing will only be of vague historic interest, given the recent rash of government spending pledges.

There are no euro zone ecostats on the agenda and South African inflation is the only other statistic ahead of lunch. It is forecast to have slowed from 4.5% to 4.4% in July.

This afternoon's Canadian consumer price index data are expected to show inflation decelerating from 2.0%  to 1.7%. US existing home sales are pencilled in at 5.39 million for July, a 2.5% monthly rise. Tonight the CBA will release its August purchasing managers' index readings for Australia.

GBP: Manufacturing orders beat forecast

GBP: Manufacturing orders beat forecast

CHF: Joint leader with sterling

CHF: Joint leader with sterling

EUR: Unhurt by Italy PM's resignation

EUR: Unhurt by Italy PM's resignation

USD: Awaits FOMC minutes

USD: Awaits FOMC minutes

CAD: Inflation data due

CAD: Inflation data due

Weekly roundup

Weekly roundup

Go to Weekly round up
Personal payments

Personal payments

With a personal account you can enjoy competitive exchange rates and low fees on all your payments.

Find out more
FX business solutions

FX business solutions

We provide tailored services to help companies make global payments and manage their foreign exchange risk.

Find out more
Travel money

Travel money

Order your travel money for branch collection or secure it on our explorer multi-currency Mastercard®.

Find out more