Data 3 - 4 Brexit
Brexit related movement
Britain's prime minister sought to brush off accusations of muddled thinking when she was interviewed on television yesterday. Au contraire, as the BBC reported; "people who thought the country could keep 'bits of EU membership' were missing the point that it 'would be leaving'." So, no single market and a lower Pound this morning.
Investors were not reassured by Theresa May's desire to get "the best possible deal for us" and they were nonplussed that three times she avoided the question "Are you prioritising immigration over access to the single market?" They came away with the idea that she is doing exactly that and, as oft discussed, the harder Brexit looks the tougher the treatment Sterling receives from investors.
Since the Far East opened this morning they have been chasing the Pound lower. It is down by an average of -1.0% from Friday's opening levels and its losses include two US cents and one euro cent. To look at that a different way, Sterling has fallen by an average of -0.3% since last Tuesday morning: one Brexit wobble has more than wiped out the advantage of three strong purchasing managers' index readings.
The top performers since Friday morning are the North American Dollars, both of which are up by 1.6% against the Pound. By fortunate coincidence the United States and Canada simultaneously released strong employment data that encouraged buyers of the two currencies.
The 156k monthly increase in US nonfarm payrolls would, on its own have been a disappointment because investors were expecting the number to be 178k. However, upward adjustments to earlier months just about made up for the shortfall and the 2.9% annual rise in average earnings extended the trend of accelerating wage growth.
In both the States and Canada the rate of unemployment went up, America's from 4.6% to 4.7% and Canada's from 6.8% to 6.9%. However, that was explained by increases in the participation rate and the number of Canadians in work increased by 56k. The Loonie also received some help from an unexpected trade surplus as exports grew more strongly than imports.
Half of today's economic statistics had already been released by the time London opened. Among those that remain, only the Halifax house price index has anything to do with Sterling and even that might not actually appear today.
Earlier on Australia's construction PMI beat forecast at 47.0 while building permits went up by a monthly 7.0%, bringing the annual decline down to -4.8%. German industrial production increased by a monthly 0.4% and an annual 2.2% and the trade surplus widened as exports outpaced imports.
Other data from Europe this morning cover Swiss retail sales, Italian and Euroland unemployment, Portugal's balance of trade and Greek industrial production. Sentix publishes its index of euro zone investor confidence. There are no important data from North America though two regional Federal Reserve presidents, Eric Rosengren and Dennis Lockhart, have speaking engagements this afternoon.