Intermission

One step

Jean-Louis Bourlanges, a French professor and one-time member of the European Parliament, neatly summed up the effect of the Brexit vote: "Before, the UK had one foot in and one foot out of the EU. Afterwards, it will be exactly the opposite."

The same cannot be said about sterling: its situation has changed markedly as a result of the vote. However, it does at last seem to have exhausted the supply of aggressive sellers. On average over the last 24 hours the pound strengthened against the other dozen most actively-traded currencies. Alright, the gain was an almost-invisible 0.1% but a journey of a thousand miles begins with a single step.

Stock markets around the world were in better shape too and the day's top performer was the South African rand. That is surely a sign that investors have recovered some of their appetite for risk. Another is that the two currencies sharing last place were the safe-haven Swiss franc and Japanese yen, which were down by -0.6% against sterling. The pound was up by half that much, a third of a cent, against the US dollar.

Mixed picture

Data and comments on Wednesday were not wholly positive about the broad economic picture but there were no surprises and some were vaguely upbeat, notably the upgrade to first quarter growth in the States. The European Central Bank president made two appearances in two countries, covering two quite different subjects.

Mario Draghi's first outing was in Sintra, Portugal, at a gathering of central bankers. His message to the audience was that they should cooperate on monetary policy. "In a globalised world, the global policy mix matters." Sig. Draghi did not mention the UK referendum during that outing but brought up the subject at his second gig, in Brussels, telling EU leaders that Brexit would reduce euro zone growth by between 0.3% and 0.5% over the next three years.

As for its impact on US growth, nobody has any real idea but it is unlikely to have a positive influence on lacklustre growth. Yesterday's data made it a little less anaemic than previously thought, as quarterly gross domestic product was revised up from 0.2% to 0.3% 

The return of the ecostat

Investors seeking a distraction from the relentless torrent of Brexit speculation will at least have a few economic statistics to ponder today. Although none of them is particularly important their appearance might collectively contribute to an increased sensation of normality.

Nationwide's index of UK house prices put them 5.1% higher on the year. Mortgage approvals are forecast to have continued their decline in May, after their pre-tax-increase jump earlier in the year, while personal loans almost double. Euroland will generate a handful of confidence figures and German inflation should be either 0.2% or 0.4%, depending on which measure is preferred. 

The US data cover personal income and spending and pending home sales. At some point the Fed will reveal the results of its bank stress tests.