Was that it?

Levelling out

Investors in Europe and America showed no interest in chasing the euro higher on Monday. One can only imagine that the precautional orders they had placed on Friday evening either had or had not already been executed in the Far East and they had nothing more to say. Currency movements were consequently modest.

On average sterling was unchanged on the day. It was down by a fifth of a cent against the euro, the Swiss franc, the US and Australian dollars and the yen. Making up for that were gains of one NZ cent and three quarters of a Canadian cent. The gap between the Norwegian krone at the front of the pack and the Kiwi at the rear was well under 1%.

As suspected, the economic data provided no inspiration in either direction. German business confidence measures from IFO showed companies slightly happier about the current situation and fractionally less optimistic for the future. The CBI's survey of manufacturers' order books delivered a reading of 4, a point below forecast and four points lower on the month. Canadian wholesale sales were down by a monthly -0.2%.

Tax and duty

The media are insistent that the first hundred days of a presidency are a sort of honeymoon period, during which the new guy is supposed to get thing done. With only five of those days remaining, Donald Trump came up with two things yesterday: income tax and lumber duty.

The White House let it be known that Mr Trump want to lower the corporate tax rate to 15%. The story was a follow-up to his comment on Friday that he was aiming for "maybe the biggest tax cut we've ever had". Also on Monday he told journalists that "we're going to be putting a 20% tax on softwood lumber… coming in from Canada". Neither had much effect on the US dollar.

However, the threat of an import duty on Canadian softwood was unhelpful to the Loonie. The Canadian dollar lost half a cent on the news, partly as a result of the direct impact the tariff is likely to have and partly because it represents a further souring of trade relations between the two countries.


The holiday in New Zealand and Australia meant a slow start this morning that was compounded by a complete lack of economic data from the Far East. The rest of the day's programme is hardly any more action-packed, with most of the ecostats coming from the States.

European figures this morning cover Swedish unemployment and British public sector borrowing. Those from the US after lunch relate to house prices, consumer confidence and new home sales, none of which are notorious for their market-moving potential. The Australian inflation figures appear tonight.

The question today will be whether the euro has any gas left in the tank after Monday morning's leap. Are investors still bullish or might they worry about writing off Marine Le Pen too prematurely?