Concessions

Sanctions and war games
When the leaders of the United States and North Korea met there was much shaking of hands and patting of backs. The two men even signed an agreement; Kim with a fountain pen and Trump with a whiteboard marker. For peace on the peninsula it looked promising. Economically it was irrelevant.

Both claimed victory. For Trump the optics of a hard-fought peace deal should go down well with his fan base ahead of the mid-term elections. For Kim the obligation to "work towards" denuclearisation is not too onerous if it is accompanied by US concessions to end sanctions and US-Korean military manoeuvres and, of course, by reassurance about his personal security.

Investors tried and failed to find inspiration in the event. There was no evidence of a rush from safe-havens towards riskier assets, nor any sign that the US dollar had become less or more in demand. It was flat on the day against the pound and the Swiss franc and a quarter of a cent firmer against the euro and the yen.

Meaningless vote
Later in Westminster the pro and anti-Brexiteers both claimed victory in the Commons. The Brexiteers said the Remainers had backed down from forcing a "meaningful vote" on the final Brexit treaty while the Remainers celebrated the concession they had wrung from the prime minister.

In a sort of trust-me negotiation with the potential rebels Theresa May allowed that they would have a say, perhaps even before the end of the year, as long as they voted down a Lords amendment that would bind the government's hands. In a parallel universe it might be described as a win-win result: in this one it simply kicked the can down the road.

Nevertheless, sterling's supporters seemed happy with the outcome. They had been somewhat downbeat earlier on, when the data showed UK wages rising more slowly than expected but the PM's concession let them continue to believe in a soft Brexit. Sterling was an average of 0.3% firmer on the day, once again courtesy of another pasting for the South African rand, which distorted the bigger picture.

Inflation
The third of sterling's four ecostat trials this week comes this morning with the UK inflation figures. Hopes of a rate increase by the Bank of England this summer are not entirely dead but they might expire if inflation takes another step lower today.   Tonight the Fed is expected to deliver another rate hike.

Analysts are forecasting an upward tick in the headline rate of UK inflation from 2.4% to 2.5% with the core measure unchanged at 2.1%. At those levels or higher the pound should be safe.

At seven o'clock the Federal Reserve is confidently expected to raise its Funds Rate target range by 25 basis points to 1.75%-2%. More important than the rate move will be the Fed's statement and its "dot plot" of where committee members see rates going in the future. Higher dots further out would be dollar-positive.