Central banks all around

Norges and SARB

The Scandinavian crowns shared the honour with the euro on Friday, strengthening by 0.7%. For the Norwegian krone it was a second successive day in the yellow jersey despite a late downturn in the price of oil and it starts today 2% above its position on Thursday morning.

It was Norges Bank that gave the krone its big break when it announced on Thursday that it was leaving the key policy rate - the rate paid on banks' deposits at the central bank - unchanged at 0.5%. The statement went on to say that the rate "will most likely remain at today’s level in the period ahead", marking a significant change from the previous policy statement three months ago which predicted that "the key policy rate may be reduced in the course of the year".

It was the opposite case for the South African Reserve Bank later in the day. The message there was that "we may be close to the end of the tightening cycle" which took the repo rate from 5% at the beginning of 2014 to 7% in March this year. It was not too much if a shock to the rand but it was still one of the weakest performers on Thursday and Friday, falling by -0.5%.

Loonie winged

Canada's dollar had a bad day at the office on Friday, losing half a US cent and falling by half a cent against sterling. Responsibility for its fall was shared by disappointing retail sales figures and slower inflation. 

Analysts had not been unreasonably ambitious for Canadian retail sales, looking for them to have been flat in July. Instead they were down by -0.1% on the month. The inflation data were a more serious matter, with the headline rate falling from 1.3% to 1.1% and the Bank of Canada's core measure down from 2.1% to 1.8%. The reaction served as a reminder that investors are paying closer attention to the inflation numbers nowadays.

The first round of provisional purchasing managers' index readings brought no real surprises. All but one of the figures were above the breakeven level at 50: The 49.5 from France's manufacturing sector manufacturing was an improvement on the previous month's 48.3.

Turkey junked

On Friday night Moody's lowered Turkey's credit rating to Ba1, turning it from an "investment grade" risk into "junk". The lira is down by -1.5% from Friday's level and equities are off by -3% this morning. 

Ecostats are on the scarce side today. New Zealand has already reported a wider trade deficit in August. European data cover German business confidence, Italian retail sales and UK mortgage approvals (the BBA figure). US new home sales come out after lunch and that's just about the lot.

There will be no shortage of central bankers though. The Bank of Japan was first up. Next comes the Swiss National Bank, followed by a European Central Bank tag team, the Federal Reserve and the Bank of Canada.