USD

The US economic statistics came and went, having little bearing on the USD and allowing it to amble through Tuesday unmolested. Housing starts and building permits headed in opposite directions with permits up by 0.3% and starts falling 0.9%. The previous month's figures were revised higher.

White House thumbs were as busy as ever, with an attack on the European Central Bank president and news of a resumption of trade discussions with China. Reacting to a fall for the EUR following yesterday's speech the president castigated Sig. Draghi for deliberately weakening the euro and "making it unfairly easier for [Europe] to compete against the USA". By contrast, Trump was all sweetness and light about China's president Xi, whom he will be meeting with at next week's G20 gathering.

The Fed is expected to leave interest rates unchanged today. Investors will pay extremely close attention to what Jerome Powell says about the future.

EUR

After the fall which resulted from Mario Draghi's dovish policy guidance the EUR settled down to lick its wounds. It is 0.1% higher against the USD.  

This morning's data were all low-key. The current account revealed a slightly smaller surplus in April and construction output fell 0.8%. Investors did not seem interested.

CAD

The Loonie rediscovered its affinity for oil prices. WTI crude went up by more than 4% during the New York session before stabilizing overnight; the CAD strengthened by 0.4% against the USD.  

So focused were investors on oil prices and the apparent improvement in Sino-US relations that they ignored the manufacturing shipments data for April. For the record, shipments fell 0.6%, having been forecast to go up by 0.4%.

GBP

A second TV debate featured the five surviving contenders for leadership of the Conservative party and the keys to 10 Downing Street. From the GBP's point of view the best part of it was that none of the contenders would pledge to deliver Brexit on 31 October. Investors were reassured that none of the candidates came across as a Brexiteer extremist.

The UK consumer price index data this morning were mostly in line with forecast. Headline inflation edged down from 2.1% to 2.0% and core inflation from 1.8% to 1.7%. The GBP is 0.3% firmer on the day, partly on the back of those figures.

JPY

After a bit of a kick about as a result of the improved Chinese trade picture the JPY wandered back almost to its starting point. It is 0.1% lower on the day against the USD.

The Japanese trade figures for May did not look pretty. Imports were down by 1.5% on the month while exports plunged 7.8%. The numbers say as much about the global trade picture as they do about Japan.