Thin pickings

Three movers

It was reported yesterday morning by the Sleaford Standard that thieves had stolen a lawnmower "from a locked shed on allotments in Wellingore". Less than 24 hours later sterling had slumped by -1.9% against the Japanese yen and lost a swift cent to the Australian dollar.

The yen's rise (for it also strengthened by 1.8% against the US dollar) is the easiest of those moves to understand. The seeds of it were sowed yesterday afternoon, when the US dollar fell below trend support at ¥106, and it gathered pace when the ¥105 level was broken early this morning. Technical factors aside, the principal reason for the yen's advance was a concern that Friday morning's policy announcement by the Bank of Japan might deliver less stimulus than previously anticipated.

As for the Australian dollar, it popped a cent higher this morning for no apparent reason. There were no data to explain the move and no comments from the Reserve Bank of Australia or anyone else. It looked as though a sizeable order to buy the Aussie in a thin market had scared away the sellers. The Aussie's jump had a knock-on effect on the NZ dollar, which clocked a daily gain of two cents against sterling.

Half a dozen head-shakers

With the exception of the yen and the antipodean dollars the major currencies had a steady day, covering ranges of less than a cent. At the extremes sterling was up by half a Canadian cent and it lost half a cent to the euro. Cable was unchanged on the day.

There was little among the few ecostats to excite investors. IFO's three measures of German business confidence came in better than expected but not by enough to affect the euro. The CBI's survey of manufacturers' order books was two points lower on the month at -4 and two points higher than forecast. Data released overnight put New Zealand's trade surplus for June almost exactly in line with forecast at $127m.

Monetary Policy Committee member Martin Weale rocked sterling's boat by telling the Financial Times that Friday's weak PMI readings had persuaded him that further monetary stimulus is necessary. His change of mind makes it more likely that the MPC will cut interest rates next month. 

Ecostats 'R US

Save for Swedish producer prices and UK mortgage approvals all the data on today's agenda come from the United States. And even the mortgage figure is the narrow measure from the British Bankers' Association, not the complete number from the Bank of England.

The figures from the States cover house prices, consumer confidence, new home sales the Richmond Federal Reserve's manufacturing index, a couple of provisional PMIs and weekly oil stocks. None of those is likely to light up the market except, perhaps, for oil stocks: a high number there could dent the oil price and lead to greater caution among investors.

Tonight brings the Australian inflation data. They will have a bearing on rate expectations.