The imagination of journalists is not what it might be when it comes to visualising the size of places and things. Large vehicles or vessels are “as heavy as ten London buses”. The asteroid that will skim the atmosphere of Earth this evening is “the size of an Olympic swimming pool”. Forest fires or floods always seem to affect an area “the size of Wales” (but never Wales itself). And Germany’s -0.6% economic contraction in the fourth quarter of 2012 was “twice the size of Britain’s”.
Except they didn’t put it that way. Rather, they discussed the brighter outlook for Germany. They also pointed out that the gross domestic product (GDP) of Euroland’s economic locomotive had grown in calendar 2012 without mentioning that the expansion was “twice as small as a cocktail frankfurter” (0.1% to be precise; infinitely more than Britain’s 0.0%).
The negative German GDP figure was just one of a longish list of Q4 economic shrinkages in the eurozone. It was left to the likes of Romania and Bulgaria to come up with positive numbers but their contribution was not enough to prevent the euro area as a whole from registering a quarterly contraction of -0.6%. The effect of the news was to send the euro lower, though not by much. It lost half a cent to the pound, three quarters of a US cent and one and a half yen.
With the focus on Euroland, sterling was very much the bystander on Thursday. It was all but unchanged against the US, Canadian and Australian dollars, a touch lower against the New Zealand dollar and slightly higher against the Scandinavian crowns.
Beyond the eurozone GDP data and Greece’s 27% unemployment rate yesterday’s only other figures were for US jobless claims, which were slightly lower than forecast. Overnight, stronger-than-expected New Zealand retail sales helped the Kiwi dollar ahead and increased Japanese industrial production had no effect on the yen.
Having managed to stay out of the spotlight yesterday sterling will find it harder to do so today, because the UK retail sales figures for January are by far the highest profile ecostats this morning. The expectation is for positive numbers; anything with a minus in front of it would be deleterious to the pound in money transfer.
Other than Spanish inflation and the Euroland balance of trade there is almost nothing from continental Europe this morning. The afternoon brings Canadian manufacturing shipments and, from the States, international investment flows, industrial production, the New York Fed’s manufacturing index and the University of Michigan’s provisional consumer confidence reading. Of these, the Michigan confidence number is the one to watch.
Unless the retail sales data get in its way, sterling might be able to creep to the back door of the week without being picked on by the bullies. This might be a good time to use Moneycorp send money online service.