Trade and budget doubts
As the International Day of Happiness dawned the smiles of free-traders were not as broad as usual following the weekend's G20 gathering. The communiqué issued after the meeting differed from its predecessors in failing to mention a commitment to fighting protectionism.
G20 will, however, "strive to reduce excessive global imbalances". The dangling question, then, is whether the United States persuaded the other 19 to accept protectionism as a way of reducing America's trade deficit or if they simply demurred in order to cobble together a message to which all the finance ministers could put their signature. Either way, investors have been saddled with another chunk of uncertainty that has added to their misgivings about the viability of Trumponomics.
The US dollar was last week's poorest performer by quite a margin, losing more than two cents to the pound and two thirds of a cent to the euro, which took the penultimate slot. The administration's budget outline, issued on Thursday, did not help matters. Rather than proposing stimulative projects and measures it focused on spending cuts. It was a very different picture to the one upon which investors had pinned their hopes.
One for the pound
The minutes of the Monetary Policy Committee raised eyebrows when they revealed that one member, Kristen Forbes, had voted to raise Bank Rate by 25 basis points. The news was worth an instant cent to sterling, helping it to become the top-performing major currency between Thursday's opening and this morning.
Whilst Ms Forbes will be leaving the MPC in a couple of months' time, investors were taken by the idea that the MPC is perhaps not as unremittingly pessimistic as they had thought. That is not to say they have begun to factor in an imminent rate increase but at least they have decided that any tilt to monetary policy must now be upward.
Sterling starts today an average of 0.2% above its level on Thursday morning and second only to the South African rand. It is 0.5% higher on the week. Its achievement in the year to date is less impressive, having declined by an average of -2%, but it has taken more than a cent off three US dollar over those two and a half months.
Sterling begins the week on the front foot. There is sense that investor have suspended their bearishness towards the pound and are willing to give it another chance. Should they decide to take it higher today there are no UK economic data to get in their way.
The Rightmove index of UK house asking prices, already out, is up by 1.3% on the month and 2.3% on the year. German producer prices rose by 3.1% in the year to February.
There is not a whole lot left on the day's agenda for anyone who cannot get excited about Canadian wholesale sales. Tonight brings NZ visitor arrivals, Australian house prices and the Reserve Bank of Australia minutes.