Friendly bombs

Not Slough

Investors apparently do not share the opposition view that the UK government was being indecently high-handed when it ordered the bombing of Syria without parliamentary approval. The pound was the top performer on Thursday, on Friday and again overnight. Over the four days it is up by 1.0%.

Alright, it is too much of a jump to link the military intervention with sterling's strength as cause and effect. The US dollar is, after all, down by four fifths of a cent over the same period and the French euro by more than that. But, if nothing else, it demonstrates that investors are not worried about WWIII. As the Far East opened this morning the yen and the Swiss franc spiked only briefly higher and gold initially traded lower.

All in all it was a good week for sterling, which clocked an average gain of 1.0% and lost out only - by a fifth of a cent - to the Canadian dollar. The weekly data from the US Commodities and Futures Trading Commission showed an increase in long-sterling positions, though traders are much more heavily-committed to the euro.

Morally unfit
A slight increase in short-dollar positions showed that traders were more bearish about that currency at the end of the week. The weekend interview with the ex-director of the FBI, James Comey, is unlikely to have a direct impact on the dollar but it cannot be helpful.

The White House noise about Mr Comey, Trump's lawyer Michael Cohen, Syria, Chinese tariffs and suchlike tended to drown out the economic data at the end of last week. Friday's US ecostats were limited to the provisional Michigan index of consumer sentiment, which came in a disappointing four points lower at 97.8.

European data were similarly sparse, with inflation readings from Spain (1.2%) and Germany (1.6%) and a slight widening of the Euroland trade surplus to €21bn in February. There were no UK data of any consequence.

Coming up

Tuesday, Wednesday and Thursday will be busy ones for sterling on the ecostat front but there is nothing for it on today's list, nor anything for the euro. The US retail sales figures come out after lunch and tonight China is scheduled to release some relatively heavyweight numbers.

The United States will monopolise the postprandial agenda. Retail sales are forecast to have increased by 0.3% in March, more than correcting February's 0.1% decline. The New York manufacturing index is pencilled in for a two-point decline to 20.1 and the NAHB housing market index is expected to be steady at 70.

Tonight the Reserve Bank of Australia will publish the minutes of the policy meeting which took place a fortnight ago. China reports on February's retail sales and industrial production as well as first quarter gross domestic product. Analysts predict annual increases of 9.9% and 6.2% for sales and production: GDP is expected to have expanded by 1.5% in Q1 and by 6.8% in the 12 months to March.