EC president's audition


Such action as there was on Monday centered on the New York Federal Reserve. The most important input was the Empire State Manufacturing Survey, which told a more upbeat story than its predecessor a month ago. Where June's manufacturing index had come in at an ugly -8.6, the fist sub-zero reading since 2017, July's was a rather more healthy 4.3. The story was not uniformly positive but the report's description was that "business activity rebounded modestly".

The Fed's other contribution was rather less relevant: a call by Fed president John Williams to push ahead with replacing LIBOR as the reference rate for financial instruments. In general the day was a good one for the USD.


The unimportant data this morning were theoretically positive for the euro but the important ones were less so. ZEW's survey found German investors to be less confident in July. Economic sentiment dropped three and a half points to -24.5 and the current situation deteriorated by nine points to -1.1. Among the second-division data, economic sentiment in the euro area was almost unchanged at -20.3 and the seasonally-adjusted trade surplus widened to €20.2 billion. Italian inflation was steady at 0.8%. The EUR is 0.2% lower against the USD.  

Today's highlight in Brussels is the vote in parliament to confirm - or otherwise - Germany's Ursula von der Leyen as president of the European Commission. The post has been held until now by Luxembourg's Jean-Claude Juncker. It is an important position - the executive head of the executive branch of the EU.


Another aimless day for the Canadian dollar took it nowhere in particular. It weakened by 0.2% against the USD but held steady against the MXN.

There were no Canadian economic data and not a great deal of action from oil prices. WTI crude was a little less than 1% lower on the day.


Sterling took a beating on Monday and seemed to be heading for another one in London this morning. The discussion in dealing rooms yesterday was not about whether to sell the pound, but about which currency to sell it against. Investors offloaded the GBP because they do not like the way the two prime-ministerial wannabes have embraced the no-deal Brexit philosophy and want to abandon the Ireland "backstop".

The UK employment data this morning were entirely respectable. Unemployment was steady at 3.8% and basis earnings growth accelerated to 3.6%, well ahead of the 2% inflation rate reported most recently. Good as they were, the numbers were still not enough to soften investors' hostility towards the GBP.


Relaxed after their Marine Day holiday, the Japanese statisticians were not yet in the mood to put out any economic data this morning.

The JPY is 0.1% lower against the USD.

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