A surprise fall in unemployment is good news but the labour market trends are worrying.  Millions of people in Britain are not in work who could be. Oh-eh.

Cable has given back a chunk of yesterday’s gains, down about a full cent from recent high, presently at 1.5290.

Some event risk for sterling today in form of February public finances data.  Will also be interesting to see mortgage approvals given the recent slowdown in the UK housing sector.

Release calender as follows:

09:30 GMT: UK major bank mortgage approvals for February expected 54k

09:30 GMT: PSNB for February expected 14 bln; PSNCR expected 11.0 bln

09:30 GMT: M4 money supppply for February expected +0.8% m/m

11:00 GMT: UK CBI industrial trends for March

09:30 GMT: UK

Cable has slipped back a little during Asian overnight session, presently at 1.5220 from North American close Tuesday up around 1.5255.

UK data due today:

09:30 GMT: Latest Bank of England minutes

09:30 GMT: UK jobs report for February;  jobless claims change expected 6k, claimant count rate expected unchanged at 5%, ILO unemployment (3m Jan) expected 7.9% from 7.8%

The past two European sessions have seen decent UK clearer selling interest almost from the get go, at less elevated levels.  Will be interesting to see whether the pattern continues.

EDIT: Should have read less elevated levels.

One of these days we’re going to report that the UK press have something positive to write about the pound. Today is not the day. This article in the UK Telegraph will have dealers in early Europe testing out their ’sell’ button fairly early in the session.

• UK budget medium=term budget cuts “lack ambition”, EU says in a draft report
• Government economic growth forecast may be too optimistic
• Uncertainties over the banking sector cloud outlook

The report is set to be released Wednesday of this week but was “acquired” by Reuters.

No reaction from cable, which consolidates in at 1.5020/50 range.

• Would be surprised if Uk returned to recession, but recovery will be bumpy, fragile

So much for sterling resiliency.   Cable stops have been tripped through 1.5150 and we’ve quickly fallen to 1.5100, while EUR/GBP has rallied to .9090 having earlier fallen as low as .9047. 

 The early sterling strength was a little baffling given the raft of bad news/articles.  The improvement seems to have been down  to cable buying out of Eastern Europe and some traders finding solace in Moody’s take on the UK budget deficit.  The second part is lost on me. The only Moody comments I saw were rather unsettling.  I possibly missed something, wouldn’t be first time.

Unemployment could continue to climb as economy recovers, warns Bank of England.

A s we saw last week, cable continues to run into ready supply above 1.5200 at the moment.  Cable back at 1.5160 having popped to 1.5207 a little earlier.

Roger Bootle in The Telegraph.

The latest UK housing data is not inspiring and with the British Press having had the whole weekend to come up with some negative headlines, I would not be at all surprised to see the pound under a bit of pressure in early trade. I see cable trading in a 1.4950/1.5350 range for the majority of this week and I will again look to trade the edges of this range.

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