Sterling wins again

Brexit odds widen

The Lincolnshire Echo reports that residents of the county typically spend £2,882 a year on three holidays, two in Britain and one abroad. At first glance that might look good but supporters of sterling have enjoyed three holidays in the last week alone.

On Friday, Monday and today the pound opened as the top-performing major currency over the previous 24 hours. After its dismal performance in the last couple of months sterling's achievement will come as no small relief to those die-hards who insisted on holding onto their investment in sterling. The -8.2% loss for 2016 that they were nursing on Thursday morning is now a shortfall of "only" -6.4%.

The pound's recovery owes everything to the US president's speech last week and to the effect it is assumed to have had on voting intentions in the referendum on Britain's continued membership of the European Union. Bookmakers' prices have undergone a significant shift since Mr Obama made his comments and the odds against Britain's exit from the EU are now out at 3/1. The longer those odds, the less urgency investors feel to sell the pound.

So-so data

The laggards on Monday were an unlikely trio; the US dollar, the Japanese yen and the South African rand. There was no hint of the usual choice between risk and safety as all three fell by -0.5% against sterling. For the dollar that meant a loss of three quarters of a cent.

Investors' aversion to the yen centred on the belief that the Bank of Japan is about to accelerate its already-aggressive programme of asset purchases. Bloomberg reported that the central bank's accumulation of exchange-traded funds (ETFs) now makes it "a top 10 shareholder in about 90 percent of the Nikkei 225 [equity index]". The BoJ is said to own more than half of all ETFs and that proportion can only increase if the bank cranks up the pace of its asset purchase programme on Thursday.

Monday's ecostats were mostly unimpressive. German business confidence fell short of expectations and US new home sales were down again in March. The only glimmer was the CBI's industrial trends survey, which showed UK manufacturers' order books shrinking more slowly than forecast.

Durable goods

Today's statistical highlight is US durable goods orders, a data set as eagerly-awaited as it is unpredictable. Figures for US house prices and consumer confidence play a supporting role, along with a couple of provisional purchasing managers' indices.

Durable goods orders are forecast to have risen by 1.8% in March, which pretty much guarantees that the actual figure will be anything but 1.8%. Consumer confidence is supposed to be roughly steady at 96.0 and the Case/Shiller house price index should be up by about 5.5% on the year.

Stephen Poloz, the Bank of Canada governor, will be speaking to North American financial market professionals at lunchtime. He will then hold a press conference. Perhaps he will have something to say about monetary policy.