Economic calendar: UK labour market to draw attention

Summary:

• UK labour market is expected to produce another bag of decent numbers
• German ZEW to show how analysts’ sentiment has evolved recently
• Industrial data from the US this afternoon

9:30 am GMT - UK employment report: While Brexit has already weighed on investment expenditure, it has yet to affect the labour market. As a result, the labour market remains tight, albeit no undue inflationary pressures have arisen as of yet. This is not the case seen only in the UK but other developed economies (some emerging economies too) have also experienced such a bizarre relationship of late. As far as the pound is concerned, one needs to be aware that its performance is likely to be highly dependent on further Brexit-related developments, hence macroeconomic releases could play a somewhat less important role. Either way, another solid wage growth could raise the stakes when it comes to possible rate hikes when the Brexit thread is closed altogether. The jobless rate for February is slated to hold at 3.9% whereas average weekly earnings (including bonuses) for February are expected to have risen 3.5% after rising 3.1% in annual terms during three months through January.

10:00 am GMT - German ZEW: European manufacturing PMIs for March proved to be really hideous On the other hand, the IFO index ticked up at the same time suggesting that the latest heavy declines in PMIs (manufacturing) could be overstated. Furthermore, some encouraging signs from the February’s industrial production could also be found, thus a bounce in PMIs this month seems to likely. Although today’s reading of ZEW is not as important as the above-mentioned indices, it may sketch out the economic outlook in the eyes of analysts and investors. The index is expected to have bounced to 0.5 in April, up from -3.6 in March.

2:15 pm GMT - US industrial data: While industrial production in many European economies plunged at the turn of 2018 and 2019, it was not the case for the United States. Therefore, on that basis an economic divergence between these economies has widened in favour of the US. The consensus before today’s reading signals that industrial productions has increased 0.2% MoM in March after being flat in February. On top of that, the level of capacity utilization is forecast to have ticked up to 79.2% from 79.1%.

Central bankers’ speeches:

• 2:50 pm GMT - ECB’s Nowotny

• 6:00 pm GMT - ECB’s Lane

• 7:00 pm GMT - Fed’s Kaplan

The EURGBP is trying to come back above the significant technical area. Source: xStation5