Oil Prices Climb on Venezuela Blockade, Russia Sanctions Fears, and Supply Risks 
BoE Set to Cut Rates as UK Inflation Slows, but Further Easing Likely Limited 
U.S. Stocks End Week Higher as Tech Rally Offsets Consumer Weakness 
Trump Defends Economic Record in North Carolina as Midterm Election Pressure Mounts 
Oil Prices Climb in Asian Trade as Venezuela Sanctions and Middle East Tensions Fuel Risk Premium 
Japan Signals Possible Yen Intervention as Currency Weakens Despite BOJ Rate Hike 
China Keeps Benchmark Lending Rates Steady as Economic Outlook Remains Cautious 
China’s Power Market Revamp Fuels Global Boom in Energy Storage Batteries 
Austan Goolsbee Signals Potential for More Fed Rate Cuts as Inflation Shows Improvement 
Another post-referendum unemployment report will be published today, however, today’s report may not be a major market mover for the pound but rather work as a support for all pound based pairs, which got energized by an inflation report that showed that prices rose by 1.6 percent y/y in December compared to 1.2 percent in November. After that, it was UK Prime Minister Theresa May’s speech that boosted the pound, since her Brexit negotiations vision was much milder than expected.
One of the key measures of economic well-being is the unemployment report, which will be released from the United Kingdom today at 9:30 GMT. The reports released so far have showed not much of an impact of Brexit. For today, the expectations are similar.
Below is the preview of the report -
- As of now, the unemployment rate in the UK stands at 4.8 percent and median estimate suggests it is likely to rise by just 0.1 percent.
- So, the major focus will be on earnings growth since that will be the measure of economic wellbeing.
- Moreover, a positive wage growth should help to downsize the fear of a slowdown in the economy. It will be nice evidence that companies are ready to increase wages even in the face of a potential exit from the union. BoE governor Carney said that the central bank would be monitoring the level of income closely.
- Wage growth has been declining since October last year when it reached a peak of 2.8 percent growth excluding bonus. Wage growth was 2.3 percent including bonus and 2.4 percent excluding it last month. It has recovered from a dip in February when it grew by 1.8 percent including bonus.
- Today earnings growth is expected to be at 2.6 percent both including and excluding bonus.
It is likely to provide support to the pound if the data comes better than expected or even come in line with expectations. However, we expect the overall downside pressure to remain as the focus is on Brexit and Trump policies.
The pound is currently trading at 1.234 against the dollar.
