Flight to safety

Commodity disturbance
On Saturday lecturers from the London School of Economics led an attack on a café in Brick Lane, London. The protesters objected to the café's £3.50 charge for a bowl of cornflakes which, they claim, is beyond the means of hardworking families in the area. So much for cheaper commodities.

The fall in commodity prices might not have worked its way through to breakfast cereals but it is certainly making itself felt in the production chain and yesterday it had a considerable impact on exchange rates. Analysts at Investec, a South African bank, published a scathing assessment of Glencore, a mining and trading firm, knocking its shares down by nearly a third. The move sparked a wider sell-off, sending share prices lower around the world.

As ever, when investors are nervous they put their money into what they perceive to be a safe currency (or what they believe others see as a safe currency). And the haven currencies yesterday were the Japanese yen, the Swiss franc and the newly-safe euro. All three strengthened by around 1% against sterling, roughly a cent and a half in the case of the euro and the Swissy.

Rand routed
On the other side of that coin, a move out of commodity-oriented currencies was felt particularly by the South African rand, which fell by -1.5%. The antipodean dollars' losses were roughly equivalent to the gains scored by the euro and the franc.

The rand was seen as particularly vulnerable to continued low prices for mining production. Australia's dollar took a -0.8% hit and the Kiwi was down by -1.1%; its greater loss was probably a function of its outperformance over the previous two days.

Charles Evans and John Williams, the two Federal Reserve chiefs who spoke yesterday, failed to deliver the expected unanimity about US interest rates. Whilst Mr Williams renewed his call for an increase "sometime later this year" his colleague was considerably more cautious. Mr Evans said the Fed would need to rollout more stimulus "if things were to weaken very much". The two views cancelled out one another, leaving the US dollar just a third of a cent higher on the day.

Carney comments
The Bank of England governor will be speaking at Lloyds of London this evening. His words will be important to investors' expectations for UK interest rates and the pound. Ahead of that, the bank's lending and mortgage approval data this morning will set the early tone for sterling.

None of the ecostats on today's list are of top-tier importance. Those for Europe cover Spanish and Norwegian retail sales, German inflation and business and consumer confidence around the euro zone. This afternoon Canada prints its industrial product and raw material price indices (the equivalent of Britain's producer price indices) and America reports on consumer confidence and house prices.

Mr Carney speaks at 20:15 this evening. At midnight the Gfk index of UK consumer confidence comes out, followed by Japanese retail sales.