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After the drought, the data deluge

Stable

Volatility was not the biggest concern of investors on Monday. Within ±0.1% - a tenth of a US cent - sterling was unchanged against the US and Canadian dollars, the Swissy, the yen, the Swedish krona and the South African rand.  

The biggest loser, the NZ dollar, was not really a big loser at all. It lost half cent to the pound, 0.3%. After an unremarkable sideways drift through the London and New York sessions it suffered a setback when ANZ published its Business Outlook early this morning. Although the headline described the situation as "Stable", picky investors were not pleased to see that "a net 38% of respondents [reported] that they expect general business conditions to deteriorate in the year ahead".

Likewise with the biggest winner, the Norwegian krone got an exceedingly modest 0.2% lift from higher oil prices when WTI crude went up by all of 0.7%. There were no Norwegian economic data to colour the picture.

Brexit impasse

Sterling was on average unchanged on the day. It was exactly flat against the US dollar. The pound might have reacted to Brexit developments but nothing concrete was to be seen. A "grassroots" challenge to the prime minster was just another one of many. An imminent "showdown" for opposition leader Jeremy Corbyn had been widely flagged.

There was no lack of critical comment about Brexit from economists. The EY Item (independent treasury economic model) Club said Brexit uncertainty "will be a drag on growth for the rest of 2019". Separately, two ex-members of the Monetary Policy Committee saw the UK economy as being in a "no-man's-land" and viewed the Brexit process as being the next Bank of England governor's "biggest challenge".  

The one to watch today will be the Labour Party's National Executive Committee, which meets to agree its European election manifesto. A key aspect will be whether or not Labour supports a confirmatory vote on whatever Brexit deal parliament is able to approve. If it does, sterling could be expected to move higher.

Lots of numbers

Other than an unchanged consumer confidence figure, released overnight, UK data are conspicuously absent from a veritable cornucopia of ecostats. The most important will be euro zone GDP and tonight's Australian employment data.

Already out, three Chinese purchasing managers' index readings created a ripple when all were lower on the month and below forecast. The Caixin manufacturing PMI was barely in the expansion zone at 50.2 and it weighed on the Australian dollar, which is two fifths of a cent lower.  

Spanish gross domestic product expanded by a provisional 0.7% in the first quarter, Italy is expected to have grown by 0.1% and the euro zone as a whole is expected to report 0.3% growth. After lunch Canada reports on raw material and industrial product prices and Bank of Canada governor Stephen Poloz will make an appearance. The US data cover house prices, pending home sales and consumer confidence.

GBP: Labour referendum policy decision today

GBP: Labour referendum policy decision today

NZD: "Stable" business outlook disappoints

NZD: "Stable" business outlook disappoints

NOK: Winner by default on higher oil prices

NOK: Winner by default on higher oil prices

AUD: Held back by softer Chinese PMIs

AUD: Held back by softer Chinese PMIs

CAD: BoC governor speaks today

CAD: BoC governor speaks today

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