I’ll have these players

A football match takes place this evening, which will dominate the hopes and fears of many London market participants. In the meantime there is the tedious business of business to be done. Fortunately, there are not too many ecostats between now and then to distract from far more important matters.

The first European data this morning came from Britain and Denmark. Halifax reported that annual house price inflation slowed from 9.6% to 8.8%, thanks to the first monthly dip since January. Danish industrial production increased by 2.6% in May, perhaps driven by the stockpiling of paper tissues ahead of tonight’s game. German industrial production declined by 0.3% for a second month.

Italian retail sales and Swedish industrial production, together with the European Commission’s economic forecasts, complete the roundup for Europe this morning. Canada’s Ivey PMI appears after lunch. This evening, the Federal Reserve will publish the minutes of June’s FOMC meeting, leaving an hour for investors to analyse the document before the match kicks off.

To buy or not to buy, that is the question

Yesterday’s price action was proof – as if it were needed - of Nils Bohr’s assertion that “prediction is very difficult, especially if it’s about the future”. Oil dropped 5%, sending the CAD and NOK south. The JPY sneaked into the lead, followed by the USD and CHF. And just about nobody saw it coming.

At first glance, weaker than expected German factory goods orders (3.7% lower on the month in May) tipped the euro off its perch. But although the timings match with regard to the US dollar, it was not until an hour and a half later that the euro set off lower against the day’s eventual winner, the Japanese yen. And there was no move at all for GBP/EUR, which is unchanged on the day.

The firmer US dollar supposedly provoked a sell-off for oil, an argument that conveniently ignores that the two moves took place several hours apart. Nevertheless, the falling oil price dragged the Norwegian krone 1.1% lower against its peers and cost the Canadian dollar an average of 0.5%.

There is nothing either good or bad but thinking makes it so

In absolute terms, at least, Tuesday’s economic data were positive. Purchasing managers’ indices from Britain and the United States were all higher than 60, on a 0-100 scale in which anything above 50 is a good result. But the moaners and haters were not satisfied.

They had no problem with Britain’s construction sector PMI, which beat forecast by three points with a 24-year high of 66.3. However, they were all over the US services PMIs from Markit and ISM. At 64.6 and 60.1 they were lower on the month and below forecast, therefore unacceptable. Ironically, they hurt the commodity currencies, not the US dollar.

Eurozone data on Tuesday morning did not affect the euro. Although ZEW’s survey of economic sentiment was 20 points lower on the month it was still in the upper reaches of its long-term range. Retail sales went up by an annual 9% in May, beating expectations of an 8.2% increase.