The currency markets have a quiet day following the last two week’s volatility

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After two weeks of turmoil in the equity markets and foreign currency exchange markets, yesterday was notable for a sense of order in the markets. There were movements of less than half a cent for Sterling against the Euro, the US Dollar, the Canadian Dollar, the Yen, the Swiss Franc and the South African Rand. Only the Australian Dollar and New Zealand Dollar managed to drift higher and maintain those gains.

The data calendar was also very sparse with the lack of data contributing the quiet day overall. New Bank of England monetary policy committee member Ben Broadbent was quoted as saying the economic outlook "has softened since earlier this year" and confessed to having a less hawkish (a hawk supports higher interest rates) attitude than when he joined the MPC two months ago. His comments had no impact on Sterling because he reinforced what everyone already knew; soft monetary policy, accommodative low interest rates and potential stimulus.

It seems US Federal Chairman Bernanke's testimony in Jackson Hole on Friday is still the focus for investors this week. With QE3 still high on the agenda despite the high inflation environment and the Fed’s dual mandate on inflation and growth it has the potential to cause some volatility.

It is a busier day today on the data front; already out is the Chinese manufacturing purchasing managers' indices, up by half a point to a near-neutral but still negative 49.8.

From Germany and the Eurozone come sentiment surveys and the provisional PMI's. This morning's UK contributions are BBA mortgage approvals and the CBI's latest retail sales figure whilst Canadian retail sales and US new home sales feature in the afternoon session. Hardly a data banquet, but more than yesterday's famine.