Hiring Pace in the UK Remains Firm
The just out labour market report in the UK has revealed that hiring pace in the nation remained robust and domestic wages continued to grow at a firm rate for the three months ended February, thereby offering evidence that spare capacity in Britain’s jobs market continued to fall, despite stalled consumer prices in the UK.
Across the Atlantic, investors will keep a tab on today’s inflation data in the US which is expected to show that growth in consumer prices, excluding food and energy, remained unchanged for March. Additionally, the preliminary Reuters/Michigan consumer sentiment survey will be noted today to gain an insight into the health of domestic spending for April.
Pound Sterling – UK Markets
The just released labour market data has revealed that UK wage growth, excluding bonus, increased more than expected for the quarter to the end of February. However, the print showed that average earnings including bonus rose at a slower than expected pace. Markets will continue to monitor data on wages and inflation closely going forward, for cues on the underlying strength of the British economy. Meanwhile, the number of job additions in UK’s economy were stronger than expected and the ILO unemployment rate ticked lower in line with estimates, for the quarter ended February. This upbeat data has resulted in the Pound to strengthen against its key peers and let it to move past the 1.5 mark against the greenback.
Yesterday, Sterling gained against the US Dollar amid absence of fresh economic data out of the UK. The Pound inched higher to the 1.49 mark against the greenback, largely driven by the disappointing housing related data in the US.
US Dollar – US Markets
The US Dollar continued to retreat against its peers, as disappointing economic releases lately have stoked fears of growth in the nation slowing during the first quarter, thus leaving little room for the central bank to tighten its policy measures in the immediate future. During the day ahead, CPI data from the US will be in focus. Headline consumer price inflation is expected to accelerate following the recovery witnessed in oil prices during the previous month, while core inflation is expected to remain steady. Separately, preliminary print of the Reuters/Michigan consumer sentiment index will shed light about the overall consumer morale in the midst of simmering signs of headwinds in the labour market.
The US Dollar lost ground against its key peers yesterday, after data showed that US housing starts rose at a slower than expected pace for March, despite improving weather and low interest rates in the nation. Other data showed that the number of new claims for jobless benefits rose unexpectedly last week, while manufacturing activity in the Philadelphia-region expanded at a moderate pace for April.
Euro – European Markets
The Euro traded higher against its major counterparts in yesterday’s trading session. Meanwhile, fresh news regarding Greece’s burgeoning debt crisis renewed concerns of Greek leaving the Euro zone. The cash strapped country is due to make payments to the ECB and the IMF in the coming days. Yesterday, a media report revealed that Greek officials had enquired about delaying payment to the IMF earlier this month which was reportedly turned down by the IMF Chief, Christine Lagarde. Meanwhile, prospects of agreeing on a deal to offer additional funding to Greece in the Euro group meeting later next week seems bleak, as the country is yet to submit a detailed list of proposed reforms.
The Euro is trading firmer against the US Dollar this morning, as sentiment towards the greenback remains fragile following yesterday’s release of mostly downbeat US economic reports. Later today, market participants will eye the release of the final consumer price inflation data in the Euro zone. Data released today showed that the seasonally adjusted Euro zone’s current account surplus dropped for February.
Other Currencies – Highlights
The Swiss Franc has given up its early session gains and moved lower against the US Dollar this morning, after data revealed that Switzerland’s real retail sales sank deeper into contraction, on an annual basis, for February. The data adds to further evidence that the Swiss economy continues to falter with the surging Swiss Franc leading to significant challenges for exporters.
The Swiss Franc traded higher against the US Dollar yesterday, with the greenback falling below the 0.96 mark, on the back of an unexpected increase in US initial jobless claims. In economic news, data released yesterday showed that the producer and import price index in Switzerland rebounded on a monthly basis, surpassing market expectations of a flat reading for March. The prices rose for the first time in ten months, driven by higher prices for petroleum and petroleum products during the period.