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Friday 24 January 2020

Ulster Bank Markets Daily Top Three

Solid UK labour market data
Solid UK labour market data

Darren Thornberry

Solid UK labour market data

Uk Labour market data released yesterday showed employment increased by 172k in Q2 with the unemployment rate holding steady in June at 4.9%. Wage inflation did pick up slightly in the April-June period, which was good to see, probably reflecting the introduction of a higher minimum wage back in April. Claims fell by 8,600 last month compared to an increase of 900 back in June. The data suggests little impact on the UK labour market in the run up to the Brexit vote. The data was welcome news for the pound helping to halt its recent slide.

FOMC minutes from July meeting

The minutes showed officials were divided in July over the urgency of raising interest rates again but generally agreed to wait for more data before another move. Since the meeting, U.S. data has been mixed with hiring showing a sharp increase while retail sales stagnated in July. Producer prices fell last month and consumer prices were flat, bolstering the argument that inflation remains subdued. The dollar fell against most of the majors on the Fed’s cautious stance with EUR/USD currently trading above £1.13 and cable hovering around £1.3050.

Economic data to watch today

There is plenty of economic data to digest today with UK retail sales figures (July) coming out first at 09.30am. They are expected to improve month on month to 0.2% from -0.9% but to be down slightly year on year. The big release from the Eurozone is out at 10.00am where inflation is expected to have fallen month on month but show an increase year on year to 0.2% from 0.1% previously. Over in the U.S, we have jobless claims numbers and the Philly Fed business index coming out at 13.30pm together with FED members (Dudley & Williams) speaking at 15.00pm & 21.00pm, respectively. So an action packed day, data wise, that is sure to have an impact on the markets through the day, one way or another.

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