Words

Grilled bankers

Janet Yellen, the chairperson of the US Federal Reserve, spent three hours delivering her six-monthly testimony to the House Financial Services Committee on Wednesday afternoon. As they would say in Yorkshire, she talked a lot and said nowt. The ECB's Mario Draghi was more forthright when he appeared in Berlin.

Not surprisingly, the congresspeople plied Ms Yellen with a long list of questions about monetary policy in a half-hearted effort to get her to reveal numbers and dates. Equally unsurprisingly Ms Yellen fended them off with generalities and platitudes. Yes, interest rates will eventually need to go up: No, she cannot say when that will be. Ms Yellen's only concession was to advise the committee that the 2% inflation target is just that; a target, "not a ceiling".

Over in Berlin the European Central Bank president was enjoying what the ECB billed as an "exchange of views" at the Bundestag. The Bundestag's view was that sub-zero interest rates are crucifying savers and banks: Sig. Draghi's view was that Germans are actually doing quite well from the ECB's ultra-relaxed policy stance. He was adamant that negative rates are not responsible for the troubles of the German banking system.

Zero sum game

If Mario and Janet failed to talk the FX market into inactivity yesterday they certainly provided nothing to kick things off. As near as makes no difference the pound, the US dollar, the euro, the Swiss franc, the antipodean dollars and the South African rand are unchanged on the day against one another.

Investors refused to get excited about durable goods orders neither rising nor falling in August: overall orders were flat on the month having been expected to fall -1.4%. That was because the "ex transportation" figure (ignoring fleets of airliners and suchlike) was right on target at -0.4%.

The only other data of any real consequence were for Japanese retail sales. They were down by -1.1% in August and -2.1% lower on the year.

Striking oil

At an ad hoc meeting in Algiers yesterday evening the Organisation of Petroleum Exporting Countries struck an unexpected deal to limit production. The news took crude oil prices 5% higher on the day and did wonders for the Loonie and the krone even though implementation details have yet to be decided.

The Norwegian and Canadian currencies both went up by nearly 1% on the day as a result of the OPEC deal. On the other side of that equation the yen fell by a similar proportion. 

There is a fair sprinkling of ecostats on today's list, none of them hugely important. German unemployment will be about 6.1% and UK mortgage approvals will be roughly 60k. Nobody is too fussed about the official EC confidence measures, all of which should be at or slightly above last month's levels. Top billing goes to the second revision of US second quarter growth, expected to be unchanged at 0.3% (annualised 1.3%), despite it now being three months out of date.