Payrolls lift dollar
Jobs and votes
A report published overnight discusses the remuneration of FTSE100 chief executives. It was put together by an outfit called the "High Pay Centre". Now that's got to be the place to work. Failing that, consider the United States, where half a million jobs were created in June and July.
After a disappointingly small 24k rise in May US nonfarm payrolls increased strongly in June and July. The July figure released on Friday put the monthly increase at 255k, not quite up to the level of June's 292k but still well ahead of last year's 213k average. Investors liked the number, believing it would make the Federal Reserve more inclined to deliver an interest rate increase this year. The US dollar was Friday's joint winner among the major currencies, adding half a cent against sterling.
Alongside it was the South African rand, which has been on a bit of a roll recently. The prospect of low-for-longer major currency interest rates has helped it along, as has the quest for higher returns following the Brexit vote in June. It received a specific boost from local elections at the end of last week which diluted the ANC's grip on power. Investors saw the result as positive both for the country and for its credit rating, which is currently only one notch above "junk".
The Bank of England governor had little option but to cut the Bank Rate on Thursday. To avoid boring predictability he also wheeled out a mechanism to stimulate commercial lending and announced another £70bn of quantitative easing.
Just about everyone had been expecting the quarter-percentage-point cut which halved Bank Rate to 0.25%. Far fewer had been geared up for an extension of the Bank's asset purchase scheme and just about nobody was ready for the governor's promise to take rates even closer to zero before Christmas. Alright, it was not quite a promise but it came jolly close. The assumption now is that, unless the UK economy picks up, the Old Lady's benchmark interest rate will be down at 0.1% by the end of the year.
Oddly enough, the Bank's new policy stance did not endear investors to sterling. Compared with Thursday morning's levels the pound is down by an average of -1.6%. Even its smallest loss - against the NZ dollar - is a full -1%. The majority of the damage was done on Thursday: sterling recovered a little ground on Friday.
Not a lot
Today's ecostat agenda is already over and done with. It began with China's balance of trade and ended with German industrial production.
The Swiss inflation data come out shortly after London opens but they will make no difference to interest rates or the franc. The same is true of Greek inflation figures later this morning.
After lunch Canada reports on building permits. There are no US statistics. The BRC retail sales monitor at midnight is unlikely to make any difference to sterling either.