UK unemployment continues to impress, yet earnings hit record low
17/Jul/2014 • Currency Updates•
May unemployment rate and the number of jobless claims hit fresh 6 year lows, at 6.5%. The claimant count fell for the 20th consecutive month. Total employment rose by 254K to 30.6mln in the three months ending in May. Even as unemployment fell further, British workers earnings grew at the slowest rate on record, giving the Bank of England pause for thought as it prepares to start raising interest rates.
Official data showed average weekly base rose just by 0.3% in the three months ending in May from 0.8%, the slowest in five years. An ONS official said May’s total earning growth was still affected by comparisons with the same month last year, when many companies made delayed payments on bonuses to help their employees benefit from an earlier cut in income tax.
Yesterday saw a new 2 year low for EUR against sterling, following GBP data and the further sanctions against Russia with the EU council stating that they were looking to hit groups that were actively financially supporting the decision makers responsible for the events in Crimea.
Against USD, the euro fell to its lowest point in a month. Further pressure lies for the euro as speculative investors continue to sell EUR against USD. The sanctions imposed have also caused European Stock Futures to fall after the Stoxx Europe 600 Index rose by the most since April.
ECB Executive Peter Praet said the measures adopted in June to cut the euro’s strong appreciating momentum had succeeded but the central bank will continue to closely monitor the exchange rate developments. He went on to say that it is difficult to manage the exchange rate and the ECB does not have an exchange-rate target.
Only CPI YoY out of the Eurozone today.
Following the FED report yesterday conveying an optimistic outlook across the world’s largest economy we saw dollar gains over the euro and sterling; the euro slipping 0.3% and sterling slipping 0.1%, exacerbated by stagnant earnings growth in June.
Industrial production came in just under expected at 0.2% whilst US producer prices came in marginally above expectations also at 0.2%.
The 10 Year US Treasury note traded within a narrow range increasing 3/32 in price, yielding 2.538%.
Yesterday saw President Barak Obama target Russian oil giant Rosneft with sanctions intended act as notice to Moscow that continuing violence in eastern Ukraine is unacceptable.
The Canadian dollar, after a three month period of being one of the best performing currencies against USD, has begun to drop.