UK unemployment report preview:

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, as the focus remains on the inflation, which is now hovering just below 2 percent (Bank of England’s target), upcoming Brexit negotiations, and the economic policies in the United States under new administration.

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 despite the referendum outcome.  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 remain unchanged.

• 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 heading towards Brexit negotiations. It will be nice evidence that companies are ready to increase wages even in the face of an exit from the European Union. BoE governor Carney said that the central bank would be monitoring the level of income closely, especially since the recent upbeat economic performance was due to consumer spending and credit. Income levels directly affect these two components.

• After declining since last October 2015 from 2.8 percent, wage growth has dropped to just 1.8 in February last year but recovered since then. Last month, earnings grew by 2.7 percent excluding bonus and by 2.8 percent including it.

• Today earnings growth is expected to be at 2.8 percent including bonus and by 2.7 percent including it.

It is likely to provide support to the pound based pairs if the data comes better than expected or even come in line with expectations. However, we don’t expect the data to change outlook materially.