Old Lady alert

Spot the difference

The Daily Mail reports on a theory propounded by Youtubers and the Twitterati, that Iapetus, one of Saturn's moons, was built by aliens to replicate Darth Vader's Death Star. Or could it have been the other way round? Anyway, there was precious little else to argue about yesterday.

With the exception of Germany's DAX30, which was down by -1.5%, global equity indices were virtually static. Oil went up by $2 in the afternoon but only in response to a fall in US stockpiles. The top-performing currency, South Africa's rand, rebounded by 0.8% after two days of losses. At the back of the field the Australian dollar lost a dozen ticks to the pound, seizing the wooden spoon from sterling's grasp. The Japanese yen was steady against the pound and the US dollar only beat it by the narrowest of margins.

Sterling was down by half a cent to the euro and the Swiss franc and by fractionally more than that against the Canadian and New Zealand dollars. It lost an average of 0.4% to the other dozen most actively-traded currencies but remains the top performer over the last month, up by an average of 2.3%.

Poor production bravely borne

Sterling's relative weakness appeared to owe little or nothing to poor UK manufacturing and industrial production data. Although the figures were, on balance, worse than forecast the pound actually moved higher in the immediate aftermath of their publication.

The 0.1% monthly increase in manufacturing production fell short of the expected 0.3% rise and the annual decline was -1.9%. Industrial output was down by -0.2%, only half the predicted drop, and up by an annual 0.3%. Unfortunately those changes were based on negative readings for the previous month that had all been revised downwards. Nevertheless, sterling bore the news bravely and it was not until the afternoon that the pound began to drift lower.

Elsewhere, in Portugal inflation accelerated to 0.5% and unemployment came in at 12.4%. In New Zealand the food price index was up by a monthly 0.3% and the broadly-based Business NZ purchasing managers' index was two points higher at 56.5. A fall in Australian inflation expectations, from 3.6% to 3.2%, prevented the Aussie keeping up with it Commonwealth cousins.

Super Thursday

At midday the Bank of England delivers (deep breath) its decisions on Bank Rate and asset purchases, the minutes of the meeting that came to those decisions, the voting split and the quarterly Inflation Report. At the same time Governor Mark Carney makes a speech.

There is much there to go wrong for sterling and minimal potential on the upside. It is unlikely that there will be any change to interest rates, asset purchases or the 9-0 vote to maintain the status quo but there is every chance that the governor will be gloomier about the future.

Norges Bank will also be making a policy announcement this morning. No change is expected to its 0.5% benchmark interest rate.