Oil tops the bill

Sterling chokes

After a cracking day on Wednesday, which the chancellor's Autumn Statement did nothing to spoil, sterling wallowed through Thanksgiving and floundered on Black Friday. Just as the pound's gains in the middle of last week owed little to the ecostats, neither did its losses at the end.

The only UK statistic on Thursday was the narrow BBA mortgage approvals figure, which rose for a second successive month to just shy of 40k. No issues there, then. And Friday's numbers were good, in that they all matched or exceeded forecast. The second stab at third quarter gross domestic product left quarterly growth unchanged at 0.5% with business investment rising by 0.9%; more than expected. Retail sales were strong in November, with the CBI's Distributive Trades Survey indicating a 26% monthly increase.

Yet sterling lost ground on both days. Thursday cost the pound an average of -0.1% - a dozen ticks against the euro and the US dollar - against the other dozen most actively-traded currencies and it was down by twice that much on Friday.

Deal or no deal?

The shape of the US dollar's progress over the last couple of days bears a striking resemblance to that of crude oil prices. On Thursday and Friday, when it looked as though OPEC would reach a deal on limiting output, both were steadyish. This morning, both moved lower. 

Since Friday morning the US dollar has lost half a cent against sterling and the euro. The bulk of that move took place in the Far East this morning after oil opened half a cent below Friday's close, -4% below Friday morning's level. The trigger for all that was the news that Saudi Arabia had cancelled a meeting with non-OPEC oil producers because OPEC itself remained unable to find a compromise.

The dollar was the weakest among the major currencies over the last trading day while the yen led the field with a one-yen gain over sterling. The Canadian dollar did almost as badly as the Greenback although the Norwegian krone, another energy-related currency, strengthened slightly.

Draghi up

As the end of the month approaches the data calendar has a typically empty look. There are no UK statistics today and none of any real consequence from North America. Two central banks could potentially enliven the proceedings; the ECB this afternoon and the BoC tonight.

Today's brief ecostat agenda comprises Swedish and Norwegian retail sales, a handful of euro zone confidence measures and the Dallas Fed's manufacturing index. Japanese employment and retail sales figures come out tonight.

European Central Bank president Mario Draghi will make his quarterly appearance in front of the Committee on Economic and Monetary Affairs (ECON) of the European Parliament at two o'clock. Bank of Canada governor Stephen Poloz will address the CD Howe Institute, an economic think-tank, at 2300h, following which he will hold a press conference. Both are sure to be interrogated about the outlook for the economy and monetary policy.