Unmoved by the Supreme Court

Still in the game

It was quite a day for Britain's pound. Even though, in the end, it went nowhere against the US and NZ dollars and was almost unchanged against the Norwegian krone it covered a lot of ground. Although the Supreme Court's ruling threatened to send sterling lower investors eventually decided to hang onto it anyway.

For the second time in a week the government's artful management of market expectations allowed sterling to emerge unscathed from a potentially volatile situation. First it was Theresa May's Brexit speech, this time it was the Supreme Court's ruling on the activation of Article 50. Investors had been primed to expect that MPs would be granted a vote on the initiation of the EU exit process: they got it. There was some initial disappointment that regional assemblies - especially the one in Edinburgh - would not be given a say but by lunchtime the pound was back on its horse.

The remaining disenchanted bears eventually gave up the ghost in late afternoon when the pound popped a quarter of a cent higher against the euro and the US dollar. On the day it is up by one Japanese yen and is a third of a cent firmer against the euro. Its only losses are to the Canadian dollar and the South African rand.

Canada cops Keystone

Having been wounded by the prospect of Trump-induced import duties and the potential dissolution of the North American Free Trade Association the Loonie received a helping hand from the new US president yesterday. In another executive order he resurrected the Keystone pipeline to carry oil from Alberta to the Gulf of Mexico. 

President Obama had blocked the project because of environmental concerns, which are not shared by Mr Trump.  Its revival allayed some of the gloom that had followed Mr Trump's harsh words on trade. The Loonie strengthened by half a US cent and it went up by more than a cent against sterling.

Tuesday's economic data consisted mostly of provisional purchasing managers' index readings from the €Z and the US. On average they beat expectations. UK public sector borrowing was less than forecast in December.

Antipodean inflation

Australia opened the batting today with a set of inflation data that came in below forecast. The figures from New Zealand follow tonight. There will be very little in between to command investors' attention.

The Australian consumer price index rose by 1.5% in the year to December and the Reserve Bank of Australia's trimmed mean was up by 1.6%. Both numbers were lower than expected and they cost the Aussie nearly a cent on the day. The CPI figures from New Zealand are forecast to put inflation at 1.2%, considerably higher than the 0.4% reported three months ago. 

The only other important ecostats on today's list relate to German business confidence and UK manufacturing orders. The Bank of England governor will be taking part in a conference about digital finance.