Web retailer Amazon's activities surely contributed to the 1.4% monthly increase in UK online sales in June. The firm announced record profits yesterday, sending its share price sharply higher. But online business was not enough to rescue overall retail sales, which fell by -0.2% and sent sterling sharply lower.
This City AM newspaper argues valiantly this morning that the data from the Office For National Statistics are misleading. It reckons the value of sales excluding petrol and automotive "actually increased by 1.9 per cent in June". But investors don't base their trading decisions on such niceties, they base them on what's actually going on. If everyone else is selling sterling because sales were down it takes a brave person to stand in the way and say "ah, but…".
So the pound was almost the weakest performer over the last 24 hours. It fell by an average of 0.4%, losing one and a half euro cents and one US cent. The decline came to a halt after London had packed up for the day and since then sterling has held steady or edged higher.
The provisional Chinese manufacturing sector PMI came out this morning at a 15-month low of 48.2, indicating a further slowdown in activity. The Australian and NZ dollars both came under fire on the news. The Kiwi is unchanged on the day against sterling and the Aussie is down by three quarters of a cent.
Investors are acutely conscious that the health of the Chinese economy has an impact on the country's appetite for New Zealand's dairy exports and Australia's mining output. They were already uneasy about the Chinese government's long-term ability to prop up the over-valued Shanghai stock market and suspicious that last week's GDP figures overstated economic growth. A fifth successive month of slowing manufacturing activity, as measured by the purchasing manager' index, therefore acted as another warning light.
The euro was the top performer on Thursday, apparently because of Alexis Tsipras's success in getting more unpopular measures through the Greek parliament. South Africa's rand saw some benefit from a 25-basis-point increase in the central bank's benchmark interest rate to 6%, a five-year high, but it, too, was hurt by the Chinese data and is unchanged on the day against sterling.
A surfeit of PMIs
There are more provisional PMI readings to come today, from Euroland and the United States. All of them are expected to indicate growth but few are likely to be an improvement on the previous month. The United States also reports on new home sales for June. The only UK ecostat is the BBA figure for mortgage approvals in June.
The market's response yesterday to the not-particularly-awful retail sales data was really quite energetic. It might have been an over-reaction but it is also possible that it could be a sign that this particular party is coming to an end for sterling. Next week's second quarter GDP data will be critical to the pound.