How did that happen?

With a single bound

World Book Day, a celebration of literature and fancy dress, takes place annually on 23 April. In Britain the event is seasonally adjusted to the first Thursday in March, to avoid clashing with St George's Day celebrations. Today the writer is therefore dressed as James Bond.

The attire is homage to sterling, which has pulled off the seemingly impossible feat of escaping from the clutches of investors around the world who, for the last two months, have fiendishly worked towards its premature demise. Although the pound was beaten to the draw yesterday by the Australian dollar, which sneaked into a half-cent lead, on every other front it was ahead and strengthened by an average of 0.6%. Over the last week sterling has gone up by an average of 1.1%, losing out only to the Canadian and Australian dollars.

As in Cubby Broccoli's productions, sterling's escape was more a function of miracle than management: The only UK economic statistic was a mediocre 50.8 from the construction sector purchasing managers' index. Nor did the two Bank of England deputy governors do anything to talk it up. Ben Broadbent's speech focused on virtual currencies and Jon Cunliffe was warning parliament about buy-to-let. Yet the pound set off higher after the construction PMI came out and stayed (mostly) higher overnight.

Confidence grows

Global investor confidence continued to improve on Wednesday, further lifting equity and energy prices. Stronger employment numbers from the States and a vaguely upbeat economic assessment in the Fed's Beige Book helped that mood. Sterling aside, the top currency performers were the antipodeans. 

ADP's employment change figure showed the addition of 214k US jobs in February. The Federal Reserve's Beige book, the report upon which the central bank allegedly bases its rate decisions, saw economic activity growing in most regions with only Kansas reporting a modest decline. 

Overnight a three-point improvement in Australia's services PMI, to 51.8, and a narrowing of the trade deficit, with exports up and imports fractionally down, helped the Aussie build on its earlier GDP-related gains. Investors were not unduly distressed by a lower-than-expected 51.2 services PMI from China but it might cloud the mood today.

PMIs and Brexit

In London the focus will be on the British Chambers of Commerce conference, which will inevitably generate more rhetoric about continued EU membership. Elsewhere it will be the second - services sector - round of European and American PMIs.

Several European politicians were out on the stump yesterday proclaiming the dangers of Brexit to all concerned. The BCC professes to have no collective opinion on the subject but that will not prevent the arguments being aired at today's conference, perhaps to sterling's detriment.

The other clear and present danger to the pound is the services PMI, which is predicted to come in at the top of the class, tying with Germany at 55.1. Investors will be steeled for disappointment so a good number could take sterling higher.