Relative calm

Technical disappointment

A month ago the US dollar went ballistic when nonfarm payrolls increased by 200k and wages rose by an annual 2.9%. On Friday it dropped to the back of the field after payrolls leapt 313k and wages slowed to 2.6%.

Investors had been expecting a decent US employment report and they got one. The 313k monthly increase in jobs was the biggest in more than three years. The 2.6% annual wage rise more than compensated for the 2.2% increase in consumer prices. As investors considered both numbers there was a sort of shall-we-shan't-we moment before they decided the wage data were more disappointing than the jobs figure was positive, so they sent the dollar lower.

The slightly softer earnings figure ought not to divert the Federal Reserve from its tightening course but neither does it make any case for additional haste. The dollar lost half a cent to sterling and was unchanged on the day against the euro. The other loser alongside them was the Japanese yen. Its safe-haven qualities were not in demand.

Easing tensions

Also in the mix at the end of last week were two other Trump factors: trade and North Korea. Kim Jong Un's request for an audience with the US president was seen by most as a Good Thing, as was Donald Trump's narrowing of the protectionist tariff goalposts.

Both contributed to investors' reduced need for safety. The Swiss franc lost almost as much ground as the dollar, the euro and the yen while the commodity and energy exporters formed the leading group. The Aussie and the Norwegian krone shared first place with gains of 0.6%: the Canadian and NZ dollars did slightly less well.

The assumptions are a) that talking nicely to Kim is more constructive to world peace than rattling his cage and, b) that Trump's decision to exclude Mexico and Canada from the tariffs represents the first stage in a dilution of the whole scheme. Both of these hypotheses are, of course, subject to revision after the president's next tweet.

Odds and ends

The official schedule this week contains nothing of obviously overriding interest. Headline acts such as US and Euroland inflation seldom deliver surprises nowadays and only a couple of central banker have speaking engagements. A freshly-unfolding story about alleged misdeeds by Japan's prime minister may or may not turn out to be significant.

There are no UK economic data on this week's list. On Tuesday the chancellor of the exchequer delivers his spring Budget Report but Philip Hammond was at pains, on Sunday morning TV, to stress that it will not include anything fiscally sensitive.

Today's numbers cover Greek industrial production, Portuguese trade and inflation and - tonight - NZ food prices. So go on speculators, knock yourselves out. US inflation figures tomorrow could shed more light on the interest rate outlook but will probably not. The same applies to Friday's CPI data from the €Z. And that's about the size of it.