Daily Brief

Daily Brief

See recent articles

Waiting for Brussels

Ticking over

Brexit limbo did not look too awful for the pound on Wednesday. Nothing visible happened in Westminster or Brussels and sterling strengthened by an average of 0.4%, sharing the lead with the Norwegian krone. Although last week's unbridled enthusiasm has gone, investors are not yet ready to be bearish.

The wait-and-see mood stems from the range of possibilities now facing the Brexit process. They are mostly the same as existed a month or more ago. However, as far as investors are concerned, those possibilities no longer include an imminent no-deal crash-out however much the government continues to promote 31 October as no-deal Brexit day.

In Brussels, the EU is inclined to agree  a postponement of Article 50, though there appears to be some dispute among the EU27 leaders as to how long that delay should be. President Donald Tusk's suggestion is three months and investors expect that to be the outcome when he makes the decision known, probably on Friday. But then what? Arguably the biggest risk to sterling is a general election, which might achieve nothing more than a differently-hung Parliament.

Few on Wednesday, lots on Thursday

For a third day yesterday, statistics enthusiasts had little to sustain them. South African inflation was close to forecast at 4.1%. Canadian wholesale sales disappointed with a 1.2% monthly decline. European consumer confidence faded by a point to -7.6. And that was it.

Today will be more fun for data devotees, principally because of the provisional purchasing managers' indices from Markit. Australia kicked things off with two positive readings at 50.1 for manufacturing and 50.8 for services. Japan was mixed at 48.5 and 50.3. In Europe, no reading above 51.6 is expected and German manufacturing should take the wooden spoon once again.  

The unpredictable US durable goods orders figure this afternoon is pencilled in at -0.8% and the US PMIs will probably not look a whole lot different from those on this side of the Pond. On Friday, the important figures will be for German business confidence.

Whatever it took

Today will be the last time Mario Draghi chairs the European Central Bank's monetary policy meeting. Seven years ago Sig. Draghi won fame with his pledge to do "whatever it takes" to save the euro. His words alone were enough to take the pressure off the currency.

Today's appearance is unlikely to generate the same emotions. Christine Lagarde will succeed him as ECB president at the beginning of next month and he will not want to bind her hands. The other central bank events today are rate decisions from Sweden and Norway. Both are expected to stay put, the Riksbank at -0.25 and Norges Bank at 1.5%.

There are no UK ecostats before the weekend. Sterling must wait first for the EU's decision on a postponement of B-Day, then for the government's reaction to it and then for the opposition's reaction to that reaction.

GBP: EU delay decision awaited

GBP: EU delay decision awaited

NOK: Shares the lead with sterling

NOK: Shares the lead with sterling

CAD: Steady after wholesale sales fall

CAD: Steady after wholesale sales fall

EUR: Draghi's ECB swansong

EUR: Draghi's ECB swansong

AUD: Positive provisional PMIs

AUD: Positive provisional PMIs

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