Brexit's coming home

We have a plan
With David Davis and Boris Johnson out of the kitchen the prime minister has apparently been able to finalise her post-Brexit EU strategy. Parliament will have its first sight of the white paper today. The noises from Brussels suggest it will form a basis for negotiation.

EU chief negotiator Michel Barnier reckons "we have agreed on 80% of the negotiations". Germany's Angela Merkel thinks the plan is "a solid step forward".  The more ardent Brexiteers in Theresa May's party will take exception to ongoing regulatory ties with the EU  but they do not have the numbers to defeat her. Investors might prefer the Brexit softness to have spread to the finance sector too - the proposal relates only to goods, not services - but the EU had already rejected that idea as an attempt at cake-eating.

It might not have been the only reason for sterling's relative success on Wednesday but the existence of the plan helped the pound to strengthen by an average of 0.2% against the other ten most actively-traded currencies. It lost half a US cent and was unchanged against the euro, the franc, the yen, the Swedish krona and the Canadian and Australian dollars.

BoC tightens policy
Investors had been fairly confident that the Bank of Canada would take its benchmark overnight rate a notch higher yesterday.  The BoC duly obliged, raising it from 1.25% to 1.5%. There was some reaction at the time by the Loonie but no long-lasting effect.

The BoC statement was positive about the economy.  It said the governing council had considered "mounting trade tensions" but the effect of tariffs and counter-tariffs already applied "is expected to be modest". The bank reckons that "higher interest rates will be warranted to keep inflation near target and [it] will continue to take a gradual approach".

America's dollar was the clear winner, rising by 0.4% against the cluster of seven currencies that shared second place. The only fundamental economic factors in its favour were an acceleration in producer prices and a rise in wholesale inventories.  Although rising inventories can be a negative (nobody buying the stuff), on this occasion the increase was apparently driven by greater optimism among the marketers.

Stacks of stats
Investors will be spoiled for choice by the host of statistics that will vie for their attention today and on Friday. The heads of the Federal Reserve and the Bank of England will also be appearing in front of their respective parliaments.

There are inflation figures today from Germany (already out - 2.1%), Sweden and the United States as well as Euroland industrial production. On Friday China reveals its balance of trade for June and there are more inflation data from Spain.

Mark Carney will be talking on Friday to the Commons' Treasury Committee, regarding the bank's Financial Stability Report. Jerome Powell will be delivering his six-monthly "Humphrey-Hawkins" testimony to the Senate Banking Committee.  The subject of trade wars might come up.