- UK unemployment rate dropped to 3.9% in January, wage growth 3.4%
- ZEW index up to -3.6
- GBPUSD advances 0.2% today
The UK labour market data came in above expectations especially with wage growth at 3.4% y/y. While not spectacular in nominal terms this is still the highest this decade and with unemployment rate down to 3.9% that would normally be a clear signal for the Bank of England to raise rates and probably pushing the GBP higher. Somewhat higher number of jobless claims for February is of secondary importance here as it’s quite volatile. However, the GBPUSD is advancing by just 0.2% today as the outlook is clouded by Brexit uncertainty.
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UK wage growth is already at the highest level this decade and is clearly trending. If not for the Brexit that would see the BoE rising interest rates. Source: Macrobond, XTB Research
Meanwhile the German ZEW is up to -3.6 pts. from -13.4 in February, well above the consensus and the highest since April 2018. This is not such a big surprise as the index is well correlated with the equity market and we just see DE30 storming another 0.6% higher today. The Friday’s PMI will be way more important.
