Super Thursday

Bedfordshire's crime commissioner plans to raise £1m a year by rigorously prosecuting all drivers caught by speed cameras exceeding 70 miles per hour on the M1. Should he need more than £1m he could presumably lower the speed limit to 60. Or maybe 54.9.

Well, 54.9 was good enough for sterling yesterday, for that was the purchasing managers' index reported for the UK services sector and it helped the pound to a creditable third place among the major currencies. The Swiss franc was just 10 ticks ahead and even the leader - the US dollar - was only ahead by a third of a cent. 

The commodity currencies had the toughest time, with the commonwealth dollars - the AUD, the CAD and the NZD - all losing around a cent and a quarter. The Norwegian krone was tail-end Charlie with a -1.5% decline that coincided with a -3% fall in oil prices.

When Janet Yellen, the Federal Reserve chairperson, gave her semi-Annual Monetary Policy Report to the Congress she continued to allow investors to believe that US interest rates could move higher next month. That confirmation had a lot to do with the plight of the commodity currencies.

The buzzword in Fed circles is that December will be a "live" meeting. In other words, there is a sporting chance that the committee will do something other than sit on its hands. That still does not make an increase a done deal but futures pricing indicates that some 60% of investors are expecting one. 

Yesterday's US ecostats tended to support that view. The services and composite PMIs were all higher on the month and better than almost any country in Europe could offer. (The exception was Spain, which once again came in with the strongest reading at 55.9.) The 182k jobs increase reported by the ADP payrolls management firm boded well for a similar-sized increase in nonfarm payrolls tomorrow.

Embarras de richesses
For only the second time the Bank of England will release its interest rate decision, the minutes of the meeting that led up to that decision and the Inflation Report all at the same time. This quarterly sensory overload has been dubbed "Super Thursday" by some in the media.

There is no possibility of the bank announcing a rate increase today. There is, however, a chance that the voting pattern in the Monetary Policy Committee will reveal that another member has been transmogrified from dove to hawk. Ian McCafferty will presumably vote for an increase for a fourth consecutive month and he might be joined by Martin Weale, who last voted for one eleven months ago. Three votes for an increase would undoubtedly be positive for sterling.

Then there is the Inflation Report, to which governor Mark Carney will make an introductory speech. It will give him the chance to expand upon, or modify, his curious last comment on higher UK rates, which was that "There's no certainty that they will happen".