Nobody saw that coming
An eventful few days brought political wobbles in Washington and Pretoria, sabre-rattling by Britain against Spain and the United States against North Korea and confirmation of growth rates in the UK and the US. The runaway winner between Thursday morning and today was sterling, which strengthened by an average of 1.5%.
Let's just run that one by again. In the two days following the activation of Article 50 the pound went up by an average of 1.5% against the other dozen most actively-traded currencies. Its smallest gain was one US cent. This must be one of the most egregious examples of selling the rumour and buying the fact: On Wednesday the pound was doomed by a hard Brexit and on Thursday it didn't matter anymore. Why? Because there are huge short-sterling positions out there and some of the bears decided that the end of the quarter was not a rubbish time to buy back part of those positions.
Investors had no problems with the UK economic data. Gfk's index of consumer confidence was steady at -6 in March. Gross domestic product expanded by 0.7% in the fourth quarter, as expected, and the tiny mark-down of growth in calendar 2016, from 2.0% to 1.9%, was dismissed as a rounding error. Michael Howard's threat to protect Gibraltar's autonomy with military force was not taken literally.
After a year of rumours and false starts President Zuma's axe finally fell on South African finance minister Pravin Gordhan. His sacking on Thursday did not come as a surprise but it was costly for the rand, which has fallen by -3.7% since the announcement.
Investors saw Mr Gordhan as crucial to the preservation of South Africa's "investment grade" credit ratings. Their concern now is that his removal from the job was intended to clear the way for a looser fiscal discipline which, if put into practise, will make the government less creditworthy. The next review of South Africa's rating comes next month.
In the United States fourth quarter growth was marked up from an annualised 1.9% to 2.1%, leaving the quarterly expansion unchanged at 0.5% (0.475% vs 0.525%). The Michigan index of US consumer confidence was a slight disappointment, falling three quarters of a point to 96.9, but the dollar was unaffected.
PMI round two
On the first of every month the purchasing managers' indices from around the world provide an up-to-date indicator of how manufacturing firms are doing. Analysts expect quite a few of them to have been doing less well in March well than they did in February.
Readings already out from Australia (57.5) and Japan (52.4) were lower on the month. Britain's manufacturing PMI is pencilled it at 55.1, Euroland's at 56.2 and the States' at 57.0.
Tonight the Reserve Bank of Australia s expected to keep its benchmark Cash Rate unchanged at 1.5%. It will probably have something to say about house prices, which are too buoyant for the RBA's comfort.