Sterling out of favour

No hurry
Nostalgic for Peter and Jane? Ladybird Books has a new series for adults. One title is The Ladybird Book of the Mid-life Crisis; another, The Ladybird Book of The Shed. The Ladybird Book of Rising Interest Rates is allegedly in the pipeline but its author is in no hurry. 

Nor is Charles Evans, the president of the Chicago Federal Reserve. He is well-known for his opposition to raising US interest rates before Christmas. On Friday in Milwaukee he reiterated that stance, saying "I favour a somewhat later liftoff than many of my colleagues". Mr Evans's opposite number in Atlanta, Dennis Lockhart, is not one of them. At a rival gig in New York he said "speaking for myself, I see a liftoff decision later this year at the October or December FOMC meetings".

Investors apparently find the Evans dovishness more plausible than the Lockhart call to arms. The US dollar did firm up after Mr Lockhart told his tale but not be enough to make it any stronger this morning than it was before the two chaps offered their opinions. The dollar is down by nearly one cent against the euro and softer against the Aussie, the Loonie and the Kiwi.

Sterling trade off
The pound had an uncomfortable day, putting in the worst performance among the major currencies. It took several steps backwards after the UK trade figures for August revealed a wider-than expected deficit. Revisions to the previous month worsened the picture and sterling spent the day on the defensive.

It is not often that investors are exercised by the UK trade data. Their reaction on Friday probably had something to do with the fact that the pound was already looking heavy before the data came out and they simply provided another stick with which to beat it. Overall, sterling is down by an average of -0.5% against the other dozen most actively-traded currencies with losses of one and a third euro cents and a third of a US cent.

In general it was another good day for the commodity-related dollars and for equities. The odd one out was the South African rand. By an accident of timing it was the only big currency to lose to sterling.

Spanish National Day
There are bank holidays today in Japan, Spain and Canada. There is also a dearth of data on the agenda. The best chance of inspiration will be from the various central bankers who take to the podium.

The REINZ reported that house sales in New Zealand in September were up by 38.3% on the same month last year with the median price 15.4% higher. Other ecostats today cover Swedish unemployment and Portuguese inflation. UK retail sales (the BRC version) and China's balance of trade come out tonight.

There will be speeches from Charles Evans (again), the Bank of Canada's Stephen Poloz, and the Reserve Bank of Australia's Philip Lowe. Dennis Lockhart might also still be on the prowl.