The hot topic on Monday morning was the gruesome collection of provisional purchasing managers' index readings from France, Germany and Euroland. Every one of the nine numbers was lower on the month and below forecast. Markit's summary was that the "Eurozone [is] close to stalling in September as factory downturn deepens".
As has become usual, the weakest performer of all was Germany's manufacturing sector. At 41.4, the manufacturing PMI was at its lowest level "since the depths of the global financial crisis in mid-2009". With services at a provisional 52.5, the composite index came in at 49.1, on the wrong side of the delineator between boom and bust. Markit interpreted the data as evidence that "the German economy contracted in September". The composite readings for France and pan-Euroland barely made the cut at 50.3 and 50.4.
Speaking to the European Parliament, ECB president Mario Draghi was unable to put a positive spin on the data. He told the committee on economic affairs that "recent data and forward-looking indicators… do not show convincing signs of a rebound in growth in the near future and the balance of risks to the growth outlook remains tilted to the downside". The euro lost an average of 0.4% to the other major currencies, dropping a third of a US cent.
US expansion continues
The situation across the Atlantic, while still far from rosy, was at least slightly more upbeat than analysts had predicted. There was nothing to chose between the US and Canadian dollars, both of which were on average unchanged against the other majors.
Markit's provisional PMIs for the United States were unusually close to one another, with services at 50.9 and manufacturing and the composite index both on 51.0. All three were higher on the month and above forecast.
Canadian wholesale sales also beat expectations with a monthly increase of 1.7%, as did the Chicago Fed's National Activity Index, half a point higher at 0.10.
Supreme Court verdict
Britain's Supreme Court gave itself an extra few hours to consider the legality of Parliament's lengthy prorogation. It will announce its judgment at half past ten this morning. Sterling's position was not helped by that delay, nor by the Labour party's studied neutrality on Brexit. It was the day's biggest loser, falling an average of 0.5%.
Today's data began with Japan's provisional PMIs, which showed a familiar picture of services continuing to grow while manufacturing slows. IFO is up next with its measures of German business confidence. The two statistics from Britain are public sector borrowing and the CBI's Industrial Trends Survey. US consumer confidence and house prices come out after lunch and tonight the Reserve Bank of New Zealand is expected to keep its official cash rate steady at 1%.
This morning's Supreme Court decision is without precedent, not least because the court is less than ten years old. It is difficult to know how the government will react to a judgment the like of which it has never encountered. And it is equally hard to imagine how investors and the pound will react to that reaction. It could be something, it could be nothing.