Ever-decreasing circles

As you were
On 1 April 2009 Expedia, a travel website, offered trips to Mars for £99. Following NASA's announcement of water on the planet the Daily Mail has resurrected the meme, predicting that "Holidays on Mars are just DECADES away". Don't scoff: you may not believe it today but you might tomorrow.

At least, that would be the case if you were to change your mind as frequently and dramatically as investors seem to be doing at the moment. On Monday it was all about the flight to quality as money fled from the allegedly risky commodity-oriented currencies - the rand and the antipodean dollars - and into the supposedly safer yen, euro and franc. On Tuesday that process was reversed.

The top performer was the South African rand, which recouped the previous day's -1.5% loss, while the 1% gains achieved by the Aussie and the Kiwi also almost exactly cancelled out Monday's declines. The safe-haven euro and Swiss franc were unchanged on the day against sterling and the even-safer-haven Japanese currency brought up the rear with a loss of two thirds of a yen.

The sensation is that investors are perhaps not so much nervous as uncertain. If they identify a move they chase it and if it changes direction they chase it again. There is nothing novel about that behaviour but a relative lack of market liquidity seems to be exaggerating the action and reaction.

There were no economic statistics to fan the flames on Tuesday. The CBI's measure of UK retail sales was a decent enough 49, having doubled on the month, and mortgage approvals were up but neither figure was a particular milestone. Euroland confidence readings were higher in September except for consumer confidence, which was unchanged. Metropolitan US house prices continued to advance at a pace of 5% per year. 

In his address to Lloyds of London Bank of England governor Mark Carney focused on the risks posed to the insurance market by climate change. He stayed off the subject of monetary policy so his speech did not affect the pound.

The important numbers this morning will be the second revision to second quarter growth in the UK and the provisional Euroland inflation figure for September. There are no really high-profile ecostats from North America but three Federal Reserve bosses will be giving speeches.

The consensus is that today's gross domestic product data will confirm that Britain's economy expanded by 0.7% in Q2. It is also likely that GDP growth between 2011 and 2013 will receive an upward revision that could be worth half a percentage point a year, though that historic adjustment would be unlikely to affect the pound. Euroland inflation is pencilled in at 0% for the year to September.

It is hard to imagine the three Fed chiefs dodging the subject of interest rates in their speeches today. The one that matters most is Chairperson Janet Yellen, who speaks at 20:00.