Everybody's happy

Sterling more confident
Harris Faulkner, an American newsreader, is suing Hasbro for marketing a plastic hamster called Harris Faulkner which, she says, resembles her. The toy has eyes the size of dinner plates, enormous plump ears and a Trump-esque topknot. How embarrassing. Fortunately, sterling had no such self-esteem issues on Wednesday.

After an uncomfortable couple of days the pound was broadly higher yesterday, strengthening by quarter of a yen, half a euro cent and one Swiss cent. It didn't make huge gains, strengthening by an average of just 0.1% against the other dozen most actively-traded currencies, and it was lower against the Northern Scandinavian crowns. Even so, the overall pressure on the pound was upward, not downward.

Ahead of the UK construction sector purchasing managers' index sterling's fluctuations indicated a lack of consensus among investors as to whether the number would be good, bad or indifferent. It turned out to be indifferent: the 57.3 reading was a couple of ticks higher on the month and a couple of ticks below forecast. The pound drifted lower but not far and not for long.

Investors less nervous
There was no reaction by investors this morning to a massive demonstration of intercontinental missiles and other weaponry in Beijing. They are clearly less nervous about China's military ambitions than they are about the Shanghai stock market. And with Shanghai closed for two days there was nothing to worry about there either.

The result was a losing day for the safe-haven Japanese yen, the Swiss franc and their new buddy, the euro. Between them the only economic data of any consequence were the smaller-than-expected addition of 22k Spanish jobs, an on-target -2.1% annual decline in Euroland producer prices and a slightly below-forecast 190k increase for ADP's US employment change measure.

Overnight improvements in Australia's services sector PMI and its balance of trade were more than offset by a disappointing -0.1% monthly fall in retail sales. The Aussie was just about unchanged on the day.

Central banks to the fore
Sweden's Riksbank and the European Central Bank will both make policy announcements today. No interest rate adjustment is expected from either. Today also brings the remainder of the services sector PMIs.

Along with most other western central banks the Riksbank and the ECB are challenged by near-zero inflation, despite a 2% target. The ECB's Refinancing Rate is down at 0.05% and the equivalent Riksbank Repo Rate is -0.35%. Neither is forecast to announce further cuts but investors will pay close attention to what - if anything - their two chiefs have to say about the policy outlook.

Economist predict that Spain will once again deliver the strongest services sector PMI, pencilled in at 59.6. Second place should go to the US with a 58.1 and Britain is supposed to be half a point behind at 57.6. This afternoon the North American dollars could be affected by the Canadian trade figures or by the Challenger Job Cuts number from the United States.