VERY LITTLE GOOD NEWS FOR THE POUND

Almost every UK statistic disappoints. Investors relaxed about Greece's immediate future.

A one-way street took the pound steadily lower. From Tuesday's opening sterling had lost nearly three cents by close of play on Friday. It opened in London this morning unchanged from that level.

With one exception the week's UK economic statistics were lower on the month, lower than forecast, or both. Mercifully, it was a short list. Mortgage approvals in April numbered 45.2k, the lowest number for that month since records began in 1993. Purchasing managers' indices for the manufacturing and services sectors were down on the month, down on forecast, at 52.1 and 53.8, respectively. The sole glimmer of light came from May's construction sector PMI. At 54.0 it beat the 53.3 recorded in April and just managed to pip the 53.8 predicted by analysts.

And that was it really. Sterling did not have much to say for itself and investors were unimpressed with the few things they did get to hear. One research firm, Markit, summarised the week's figures as reducing the upward pressure on inflation and pointing to growth of no more than 0.3% in the second quarter of the year. On both counts they militated against any early interest rate increase from the Monetary Policy Committee.

The Euroland statistics were not overwhelmingly good but they did not have to excel to overshadow Britain's feeble offerings. German unemployment edged down to 7.0% and the rate of unemployment for the eurozone as a whole was steady at 9.9%. (We don't talk about Spain, where unemployment is 20.7% and 44.4% of under-25s are out of work.) Although German and eurozone PMIs were lower on the month, the services numbers beat analysts' forecasts and the manufacturing figures were not far off the mark. Euroland inflation delivered a provisional 2.7% for the year to May, not quite up to the expected 2.8% but still high enough to warrant close monitoring by the European Central Bank.

Overshadowing the data was the progress on Greece's bailouts. Greece received approval for the next tranche of last year's money, and Germany and the IMF agreed to participate in the Bailout 2.0 that that will take over where this one leaves off.

Investors are growing increasingly relaxed with the ideas that the EU, the ECB and the IMF will do almost whatever it takes to prevent a sovereign default by Greece in the near term. All three are worried that a default would expose European banks to big losses. Collectively, German banks would be facing a loss of up to 16 billion and French banks would potentially be waving cheerio to 10 billion. It would not be an ideal outcome with banks and the economy in their current fragile state.

The EU/ECB/IMF "troika" seems to have decided that the way ahead is to postpone a default by Greece for as long as possible, ideally until the economy is back on its feet and the banks' capital positions are on a sounder footing. With Bailout 2.0 they are effectively kicking the can a little further down the street. As long as investors can hear the sound of rattling they are apparently content not to throw rocks at the kickers. Whatever nastiness might transpire in a few years' time, there is no point in fretting about it today. Applying that logic, the market looked at last week's Euroland economic evidence and came to conclusion that it was more convincing than almost anything else around. That there might be a hurricane next week is no reason not to lay out the towel in today's sunshine.

For the euro, the two most important events on this week's calendar are Wednesday's second stab at first-quarter gross domestic product growth, and Thursday's ECB policy meeting and the ECB president's attendant press conference. There will be some other figures kicking around such as Euroland retail sales and various German data, but now that investors are comfortable about Greece they will be keen to know where interest rates are likely to go, and when. No interest rate change is expected on Thursday; it will be Jean-Claude Trichet's choice of vocabulary that makes the difference.

There are some middle-weight figures from the UK including the trade balance, producer prices and manufacturing and industrial production. Thursday's interest rate decision from the MPC will be significant only in the unlikely event that it delivers other than a "no change" verdict. Otherwise it will be the minutes of the meeting in a couple of weeks' time that are more important.

With the euro back in favour last week the pound could not keep pace. However, in the last 12 months sentiment towards the euro has changed direction half a dozen times and could do so tomorrow if the Greek goalposts move again. Buyers of the euro should consider fixing a price for half the money they will need with a forward purchase, and those with a short time horizon might wish to investigate buying at current levels.

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