Not panicking

Numbers in safety

There is excitement among the media that petrol "could become cheaper than bottled water". In fact, with petrol at £1 a litre it already is: Waitrose charges £1.28 a litre for Perrier. Of course, cheaper water is available, as are cheaper equities and cheaper currencies.

The New Year has brought nothing but pain to stock markets around the world. Oil is down by 17% for the year to date. And there has been a concomitant move out of the allegedly "risky" currencies into the supposedly "safe" ones. The rand is down by -4%, the NZ dollar by -2.6% and the Aussie by -2.6%. At the front of the field the yen has strengthened by 5% while the euro is up by 2.4% and the US dollar by 2.8%. Sterling, which has been pushed closer to the riskies by the uncertainty of the forthcoming EU referendum, is down by an average of -0.6% from the turn of the year.

The pound did not fare too badly on Wednesday though, despite losing one and a half yen, one euro cent and half a US cent. It lost a fifth of a Swiss cent and gave up a similar proportion, on average, to the other dozen most actively-traded currencies. The pound was lower against the Scandinavians too. Hmm, upon reflection, it actually was another rubbish day for sterling even if the commodity currencies did have a worse one.

Sentiment not stats

A general shortage of economic statistics meant there was nothing for investors to fear among the numbers but that evidently did not make them feel any more confident. Even a moderately positive economic assessment from the Federal Reserve failed to improve the mood.

The Fed's Beige Book, officially entitled "Summary of Commentary on Current Economic Conditions by Federal Reserve District", comes out eight times a year, a couple of weeks ahead of each Federal Open Market Committee meeting. It amalgamates the individual reports from the 12 Federal Reserve districts and aims to give FOMC members a feel for the state of the economy as a whole.

Yesterday's edition described regional growth as anywhere between "upbeat" in Boston and "essentially flat" in Kansas (no pun intended), with most districts reporting modest growth. As in Britain, that growth is not easily being translated into higher wages. Although there was nothing awful in the report it offered no compelling reason for the FOMC to increase interest rates at its meeting on 26-27 January.

Count the hawks

Investors will be interested to see today whether the MPC's Ian McCafferty is still in favour of higher UK interest rates, as he was over the last six months. Nobody else is likely to be, and the loss of Mr McCafferty's support would further diminish hopes of an increase.

Today's ecostat agenda is just as uninspiring as yesterday's. The Australian employment data, already out, were better than expected but did nothing for the Aussie.

Watch out for the Old Lady.