“Love at first bite” might sound like the chat-up line of a character in Twilight or True Blood. In fact it is the motto of Pork Farms, a Nottingham food manufacturer. Now, a whistleblower has revealed the firm’s secret plans for diversification into dairy products. For the millions of sophisticated Brits who yearn for the luxury of a boiled egg but lack the skill or the time to concoct the culinary classic, Pork Farms has come up with the “Dippy Egg”. The complicated traditional method, as ordained by Escoffier, Roux and Delia, involves submerging the egg in boiling water for a few minutes. Pork Farms has simplified the procedure to enable less adventurous home cooks to provide their loved ones with this chef-d’oeuvre of haute cuisine. To finish the Dippy Egg it is necessary merely to submerge it in boiling water for a few minutes. What could be simpler?
Yesterday’s FX market, for one. Except for the South African rand, which enjoyed a second day of recovery ahead of the central bank’s policy announcement on Thursday, and the Australian dollar, which retraced some of the previous two days’ losses, currency movements were small. There was nothing to choose between sterling, US dollar, the euro, the Swiss franc, the Swedish krona and the Norwegian krone. The six of them start this morning within a dozen ticks (euro equivalent) of Monday’s opening levels. The antipodean dollars are a little firmer, the Canadian dollar and the yen a little weaker. Nothing to see; move along now please.
Once the Chinese ecostats were out of the way yesterday morning investors could find little inspiration in Swiss producer prices, the New York Federal Reserve’s manufacturing index or US business inventories. Weaker than expected US retail sales figures, which rose by a monthly 0.4% a result of higher car sales, sent the dollar lower but only to the extent of negating the gains it had made earlier in the day. New Zealand inflation figures overnight had a similarly temporary effect on the Kiwi: It fell back on news that inflation had slowed to 0.7% in the second quarter but quickly recovered its equilibrium.
If yesterday’s market was a delight of Dippy Egg simplicity, todays will be more reminiscent of the hard-core, full-fat complexity of mother nature’s original. Britain opens the batting with a full house of inflation figures; everything from manufacturers’ costs to the latest generation of RPI-X. Headline CPI inflation is pencilled in at 3%; anything higher will require the new Bank of England governor to pen his first grovelling missive to the chancellor. There are more inflation numbers from Euroland, together with the balance of trade and ZEW’s surveys of investor sentiment in the euro zone and Germany. The US inflation numbers follow after lunch, accompanied by international investment flows, industrial production, capacity utilisation and the NAHB housing market index. Canada releases the figures for manufacturing shipments (industrial output) in May.
In theory, a higher than expected UK inflation number would be good for the pound, in that it would limit the Monetary Policy Committee’s scope to embark on more asset purchases. In practice, investors have become remarkably flexible with their interpretation of UK economic statistics. It is entirely possible to imagine them selling the pound on a low inflation print (because it would leave room for more monetary relaxation by the MPC) and selling it on a high figure (because the MPC would not be deterred from more monetary relaxation by a temporarily-high inflation reading). If that sounds defeatist, look how long it is since a UK ecostat sent the pound higher.
Major economic releases due today
|UK CPI (June)||2.7%||3.0%|
|UK PPI (June)||2.2%||4.2%|
|US CPI (June)||1.4%||1.7%|
|New Zealand Dollar||1.9305|
Date (e.g. 24/2/11)
Time (e.g. 16:27)
|Indicative rates as of|
Provided by Moneycorp