UCKY ESCAP

Services save sterling

At 53.6 the UK services sector purchasing managers' index exceeded analysts' forecasts. It was a far from fabulous figure but it was good enough to make sterling a little more resilient to an unfortunate appearance by the prime minister later in the day.

The UK reading was almost the lowest in Europe and North America, beating only Italy's 53.2, which was a point and a half lower than expected. Nevertheless it scored on two points, being higher on the month and above forecast. The pound enjoyed bit of a relief rally, picking up a third of a cent against the euro and the US dollar.

That modest gain will have helped sterling through a potential time of trouble when Theresa May delivered her keynote address to the Conservative party conference. It was not without incident, as a croaky Mrs May was interrupted by a protester and the slogan on a board behind her shed a couple of its letters.

Waiting for something

It would be misleading to say that nothing happened in the FX market on Wednesday: there was movement but there was not much of it. Sterling's ranges against the euro and the US dollar covered just three quarters of a cent.

As far as the net daily change was concerned, the gap between the Swedish krona in the lead and the Austrian dollar at the back was a tiny 0.6%. Give or take a dozen or so ticks the pound, the euro, the Swiss franc, the Japanese yen and the Canadian and NZ dollars were unchanged against one another.

The Aussie would have been unchanged too, had it not been for the news that Australian retail sales fell -0.6% in August. A 0.3% increase had been expected. There was disappointment also from Euroland retail sales for the same month. Forecast to rise by 2.6% they went up by only 1.2%. The euro was unaffected.

ECB account, North American jobs

Today's theoretical highlight is probably the account (not the minutes) of the last European Central Bank Governing Council meeting. Friday's is undoubtedly the US employment report, which includes the monthly change in nonfarm payrolls.

The European Central Bank does not publish the minutes of its meetings, it puts out a heavily-redacted summary of what went on. Bowderlised or not, the account is as close as investors can get to an official collective view of ECB thinking about monetary policy.

Tomorrow's nonfarm payrolls figure is expected to show a gain of fewer than 100k jobs. That would be well off the pace of 2016 and the year to date, during which the average monthly increase was 181k. The assumption is that the various hurricanes will have held down the rate of recruitment, though they didn't seem to have had much negative impact on this week's US purchasing managers' indices. No more UK economic statistics are scheduled this week but there will be speaking appearances by the MPC's Ian McCafferty and Andy Haldane.