Everybody has won
And all must have prizes
The financial new year got off to an upbeat start on Tuesday with share prices mostly higher and economic data around the world painting a generally positive picture. Currency movements were modest: the US and Australian dollars vied for the lead and Sterling was on average unchanged.
The main theme was manufacturing sector performance and in most cases it did not disappoint. Switzerland's SVME purchasing managers' index was half a point lower on the month but still looked healthy at 56.0. The Canadian measure was up by a quarter of a point at 51.8; not groundbreaking but usefully positive. Of the two US manufacturing PMIs one was a tick higher at 54.3 and the other - the more closely-followed ISM figure - was a point and a half higher at 54.7.
The real surprise was Britain's manufacturing PMI, which came in at 56.1. Not only was the number two and a half points better than forecast, it also marked a two-and-a-half-year high. It was not the sort of surprise to which investors are accustomed and they felt obliged to buy the Pound, though they did not feel the same obligation to hold onto it.
Investors were unsettled by the resignation of Ivan Rogers, Britain's senior representative to the EU. Both he and his deputy will be leaving shortly before the government invokes the Article 50 process of leaving the EU. The inference is that his replacement will be more inclined to negotiate a "hard" Brexit.
Rightly or wrongly the market consensus is that a "hard" Brexit, a complete break with Europe including departure from the single market, would be more hurtful to the UK economy than a "soft" Brexit, which would leave the country in roughly the same situation as Switzerland and Norway. The harder it promises to be, the harder investors are on the Pound.
So what could have been a good day for Sterling turned into a merely average one. The Pound added a third of a Euro cent and lost half a US cent. On average it was unchanged against the other dozen most actively-traded currencies.
Picking up the pace
The statisticians will be getting back into their swing today with more PMIs and a couple of inflation figures. This evening the Federal Open Market Committee releases the minutes of last month's meeting.
In most cases the PMIs today will relate to the services sector. There are numbers this morning from Spain, France, Germany and Euroland and the Australian and Chinese versions come out tonight. Britain's contributions will be the services sector PMI and the Bank of England's money supply data, including the aggregate mortgage approvals figure. The FOMC minutes will appear at seven o'clock this evening.
Both of yesterday's German consumer price index data put inflation at 1.7%. This morning's figure for the Euro zone as a whole is forecast to come in at 1.0%, which would be the highest since autumn 2013.