Waiting for something


A muddled end to a muddled week allowed the safe-haven Swiss franc and Japanese yen to sneak ahead on Friday. It still left both of them lower on the week against the pound, which took third place behind the South African rand and the NZ dollar.

The real excitement - if it could be called that - happened on Thursday when the UK retail sales data failed to meet analysts' forecasts and the European Central Bank failed to announce a wind-down of its asset purchase scheme. In the longer run neither event had any lasting effect on the pound or the euro but there was a bit of a buzz at the time.

UK retail sales were flat in September, both with and without the impact of fuel and energy. Investors felt obliged to show their disappointment but their commitment was lacking and sterling came in second on the day, a third of a cent behind the US dollar. There was a similar effect when the ECB did not set a date for the tapering of quantitative easing. Ahead of the non-announcement there had been a feeling that it would, prompting a spike in the euro which lasted no more than a few minutes.


Although the moves were bigger on Friday they mostly owed more to end-of-week position-squaring than to economic data or events. The yen strengthened by 0.5% while the Canadian dollar was down by the same proportion. On balance, sterling was just about unchanged on the day.

The Canadian dollar was tail-end Charlie for a third day in succession. Its earlier losses had been entirely the result of a softening oil price. Friday's was caused by an unexpected -0.1% monthly fall in retail sales which coincided with a three-quarter-cent downward spike for oil. The Loonie dropped an instant cent against the US dollar.

There was not a whole lot more to inspire investors on Friday. The prime minister's appearance at a meeting of EU leaders revealed nothing new about her Brexit plans. Britain's budget gap in September was bigger than forecast but a little smaller on the month. Euro zone consumer confidence was unchanged. Ho hum.

More of the same

Today's agenda also lacks sparkle, to the extent that nothing on it could be said to be the highlight. The only UK ecostat on the list is the CBI's Industrial Trends Survey, which looks at manufacturing orders.

Economists do not expect the devalued pound to have had any particularly positive effect on manufacturers' order books: they think the index will come in a point higher on the month bus still negative at -4. There will be a dozen or so provisional purchasing managers' index readings from Europe and the States. Japan's preliminary manufacturing PMI is already out: it was a point higher on the month at 51.7. The Euroland readings for manufacturing, services and composite are pencilled in at 52.6, 52.5 and 52.8 (no, that doesn't look logical, does it?).