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Using the indicators

Eyes and nose day

Investors are looking forward to this afternoon's session in the House of Commons. How can one know? Because the pound shared first place with the North American dollars yesterday and it had nothing else going for it.  

It might be a triumph of hope over experience to imagine that Westminster is at last about to pull a rabbit out of the Brexit hat. If so, it would not be the first time investors had been disproportionally excited by apparently positive reports. In early November, for example, sterling shot into the lead after Brexit minister Dominic Raab suggested that a deal with the EU would be done within three weeks. Even though Mr Raab turned out to be correct, the euphoria surrounding his comment was, at best, misplaced.

Nevertheless, there is at least a chance that today's multiple-choice quiz could reveal support for options not contained in the prime minister's bill. Sixteen amendments have been proposed, ranging from compliance with the will of the people (amendment E) , through a confirmatory referendum (amendment M) to revocation of Article 50 (amendments G and L). It will be a paper ballot and MPs can vote for or against as many as they choose, so the eyes and nose will not be so clear-cut today.

RBNZ dove attacks Kiwi

The NZ dollar dropped out of the back of the field overnight after the Reserve Bank of New Zealand released its monetary policy statement. It is 1.5% lower on the day against sterling and the other leaders.

The RBNZ did not beat about the bush. The second sentence in the statement ended: "…the more likely direction of our next OCR move is down". The bank kept its Official Cash Rate unchanged at 1.75% this time around but with that writing on the wall there was no way the Kiwi was going to fly today.

Tuesday's economic data did not make much of a difference. US housing starts and building permits both declined in February, as did the Conference Board's index of consumer confidence and the Richmond Fed's manufacturing index. House price inflation slowed. There were no significant data from Europe or Britain.

Brexit bingo

The proceedings in parliament today will not bring an end to the uncertainty about Britain's future but they might remove some of the more outlandish possibilities. In Frankfurt, the European Central Bank president and chief economist will participate in a presentation to analysts and journalists.

Investors will be eager to see whether the ECB can regain the crown of dovishness that was stolen from it by the Fed a week ago. Mario Draghi might have something to say about the extended period of near-zero interest rates. There are no important economic data on the day's agenda.

It looks as though there will be another day of indicative voting in Westminster on Monday, so today's results will not be the end of this unusual episode. That is especially the case now that Theresa May has committed to appearing before a group of Conservative backbenchers beforehand. Her resignation is not impossible to imagine.

GBP Buoyed by Brexit optimism ahead of voting

GBP Buoyed by Brexit optimism ahead of voting

USD Shares first place with sterling despite poor data

USD Shares first place with sterling despite poor data

CAD Carried along by the USD

CAD Carried along by the USD

NZD Slumps after central bank points to rate cut

NZD Slumps after central bank points to rate cut

EUR out of contention in  midfield

EUR out of contention in midfield

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