No panic
What sends financial markets lower? Well, selling, obviously, but not always. A classic example yesterday was when the Athens stock exchange opened after five weeks of closure. Within minutes the stock index had fallen 23%, not because investors were selling but because buyers marked down their bids.

It was no surprise that turnover was a third lower than the daily average in June. The scale of the decline was not a surprise either: analysts had predicted such a result. Consequently the equity rout did no damage to the euro. It was a quarter of cent lower on the day against sterling and lost a third of a US cent. Those moves equate to losses of 0.2% and 0.4%, small beer in comparison to the net 16.2% decline in Greek share prices.

The Norwegian krone had the toughest time, falling by 0.6% as a result of renewed downward pressure on oil prices. The Aussie came out on top with a gain of 0.8%, a cent and three quarters, after the Reserve Bank of Australia kept its benchmark interest rate steady at 2%. Investors had expected no change but they had not been ready for the delicate tone of the RBA statement, which included none of the usual bluster about the currency being overvalued.

Dull data
Investors did not go out of their way to use the monthly round of manufacturing PMIs as a lever on exchange rates. With the exception of the outlying krone and Aussie, major currency movements were limited to 0.3% or less. The pound was on average unchanged against the other dozen most actively-traded currencies.

The manufacturing sector purchasing managers' index readings brought no real surprises. Britain's figure of 51.9 beat expectations, as did the figures from Italy, Germany and the euro zone as a whole. Spain, Switzerland and the United States fell short of forecast. The toe-curling 30.2 reading from Greece was disastrous but no real shock, given the bank closures last month.

Overnight Australia reported a decent 0.7% monthly increase in retail sales and a smaller-than-expected trade deficit. Ahead of London's opening the nationwide index showed house prices 3.5% higher on the year, as expected.

Pause for breath
With the manufacturing PMIs out of the way, and the services sector PMIs not due until tomorrow, the eco stat agenda takes a breather. That should mean another day of relative inactivity and small movements for exchange rates.

Figures from Europe this morning cover Spanish unemployment, Euroland producer prices and UK construction activity. The construction PMI is not usually a market-mover but a particularly strong one could remind investors about the possibility of higher interest rates this year.

The only significant eco stat from North America is US factory orders, a figure which investors have recently found surprisingly easy to ignore. The most interesting numbers come out tonight: services PMIs from Australia and China and the quarterly New Zealand employment data for Q2. The Kiwi often reacts to the jobs data, not always logically.