The latest in our series of previews focusses on the UK unemployment report coming up at 09.30 GMT
Not so long ago the UK unemployment rate was high up on the BOE ‘s forward guidance for hiking interest rates but while the jobs data has improved steadily it’s the level of real wage growth and productivity that has taken precedent.
Expectations are as follows:
UK jobs and wages forecasts 12 Nov
Ryan had this to report from the last release and the latest PMI services and mftg data does point to a stronger employment index hence the improved forecasts for claimant count this month
But it will be eyes on the average earnings again due to its increasing relationship with economic slack and any improvement ( still very unlikely but we can hope at least) will bring some GBP buying as it will suggest rate hikes sooner than later. Those hikes have been pushed out on most forecasts til Q3 2015 so it’s all relative.
The last services PMI survey stated that
“anecdotal evidence implied that recruitment was taking place against the backdrop of a tighter labour market, with salaries and demands for pay increasing
Increased productivity may also negatively affect the unemployment rate as companies better utilise their existing workers,due inpart to an increase in part-time workers and “zero-hours” contracts that were employed by companies during the recession and still remain an inherent part of the work-force today.
I remain a rally-seller of GBPUSD and GBP in general but the lower we head toward 1.5700-50 the more cautious we should become. From current levels (1.5940) I will be keeping an eye on 1.5950-75 then again between 1.6000-10
Current demand suggests a decent report may be in the offing but we will know soon enough.
