UK unemployment rate ticks higher; Brexit remains key

10:57 am 15 October 2019

Summary:

  • Latest UK jobs data shows hints of softening 

  • Brexit still the main driver ahead of EU summit

  • GBP remains near recent highs vs USD and EUR

 

There’s been a little bit of softness in the most recent job data with the unemployment rate ticking higher. For the month of August a reading of 3.9% marked a 0.1% increase on both the prior reading and the consensus forecast while the employment change showed quite a large drop (-56k vs +26k exp vs +31k prior). Wage growth also pulled back with average weekly earnings +3.8% 3M/Y vs +4.0% 3M/Y expected and the prior revised lower by 10 basis points to +3.9% 3M/Y.

Start investing today or test a free demo

Open real account TRY DEMO Download mobile app Download mobile app

The unemployment rate remains low compared to the past 15 years but there has been a notable uptick in job vacancies in recent months. This could be seen to suggest the labour market is not quite as tight as it was. Source: XTB Macrobond

 

Overall there is a hint of weakness here but it should be remembered that the labour market remains strong by historical standards. In terms of market reaction there was a small dip lower in the pound but it has since shrugged of the release with the markets far more concerned with the latest Brexit developments. 

 

Barnier: Brexit deal “still possible”

Sterling has moved up near its recent highs against the Euro and US dollar this morning following more encouraging comments on the Brexit front. Michel Barnier has said that a new withdrawal deal is “still possible” this week with the caveat that it has become “more and more difficult” as we approach Thursday’s key EU summit. Once more this is another example of the markets honing in on the positive aspects while looking through the negative, a recurring theme of late that has been a key driver behind the recent gains in the currency. There remains much to be done before a deal can even be brought back to be voted on by UK MPs, but the markets are clearly exhibiting a positive reaction function to the latest Brexit developments  and that’s good news for sterling bulls.     

 

Separately Jacob Rees-Mogg has claimed that if a deal is agreed with the EU then it will pass through parliament, but these remarks should be taken with a pinch of salt considering that the terms of any deal remain unknown and as a staunch Brexit supporter he may be inclined to considerable bias.

GBPUSD has paused around the 50% retracement of the decline from the year-to-date high (1.3381) to the year-to-date low (1.1958). The coming days will likely prove pivotal for the pound with a move to $1.30 not out the question if a deal can be reached whereas if this proves a false dawn then the recent gains will be swiftly erased. Source: xStation

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.

Share:
Back
Xtb logo

Join over 935 000 XTB Group Clients from around the world.

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 2 March 2024
adobe_unique_id cc 1 March 2025
__hssc cc 8 September 2022
SESSID cc 2 March 2024
__cf_bm cc 8 September 2022
intercom-id-iojaybix cc 26 November 2024
intercom-session-iojaybix cc 8 March 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
__hstc cc 7 March 2023
__hssrc

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
hubspotutk cc 7 March 2023

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language