Daily Brief

Daily Brief

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Little progress anywhere

Sterling shares the lead

Sterling took the lead on Wednesday. It was no stunning victory though, firstly because the pound had to share first place with the Norwegian krone and secondly because it was only a fifth of a cent ahead of the US dollar and euro and a proportionally similar 0.2% higher on average.

With ranges of little more than a third of a cent against the other majors, the pound had a mostly uneventful day, and there were no UK economic data to suggest direction. Politically, there was no follow-through to the vague dissatisfaction that attended Tuesday night's election debate. The Liberal Democrat Party published its manifesto and the BBC helpfully summarised its main points. It contained nothing to shock or awe investors.

The political story from the United States was a mix of trade with China and the House impeachment hearings, neither of which show any sign of coming to a conclusion. On trade, the takeaway yesterday was that the much-trumpeted "phase one" agreement might not take place this year and subsequent stages "remain distant". The dollar was in the middle of the major currency bunch, unchanged against the euro, Swiss franc, yen and NZ dollar.

Fed cautious about further cuts

The minutes of the late October Federal Open Market Committee meeting were a little less dovish than investors had expected. Some members thought it appropriate to make clear that the committee had no intention of making further rate reductions.

As always, analysts went through the minutes with a fine-toothed comb, comparing the wording with previous versions. In this case the semantics seemed to indicate little chance of a cut at next month's meeting.

The only economic data of any importance were those for Canada's consumer price index. With headline and core inflation both unchanged at 1.9%, the numbers were exactly in line with forecast and were only briefly positive for the Loonie. It is two thirds of a cent lower on the day.

PMIs and another manifesto

The Labour Party is expected to publish its election manifesto today. The Conservative version is likely to appear next week. Today's ecostats include nothing terribly exciting. Friday's consist mostly of provisional purchasing managers' index readings.

This morning's UK public sector borrowing figure is not in itself hugely important. However, it could well encourage commentators to speculate how much greater that borrowing will become once the new government - of whatever hue - begins to deliver on its spending promises. At lunchtime, the European Central Bank releases the "accounts" of its policy meeting. They are not as detailed as the FOMC minutes and therefore of less help to investors.

Tonight Australia sets the PMI ball rolling, followed by Japan, Europe and the United States. Britain does not take part in the provisional PMI round. Other data tomorrow include Japanese inflation, German third quarter growth, Canadian retail sales and US consumer sentiment.

GBP: An unspectacular win

GBP: An unspectacular win

NOK: Shares sterling's lead

NOK: Shares sterling's lead

USD: Less dovish FOMC

USD: Less dovish FOMC

CAD: Lags after inflation data

CAD: Lags after inflation data

EUR: ECB accounts today

EUR: ECB accounts today

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