Sep 11 – Economic Events Outlook – Trading the UK’s Employment Report
Arslan Butt • 2 min read
What’s up, everybody.
The financial markets are on a move as the Brexit debates are still going on and the deal deadline is approaching swiftly. The European Union’s chief negotiator Barnier previously pushed a Pound rally a few days back when he drafted the idea of a customized Brexit deal. For now, the guy has signalled that EU might be willing to wait a bit longer for a deal to be executed.
The Sterling remains in the highlights as the UK economy is due to release its labor market report.
Watchlist – Key Economic Events Today
GBP – Average Earnings Index 3m/y
It’s a leading indicator of consumer inflation and shows a change in price for businesses and the government pay for labor, including bonuses. Simply put, when businesses pay more for labor, the higher costs are usually passed on to the consumer which leads to inflation.
The UK’s Office for National Statistics reported 2.4% average earnings in August, whereas, economists are expecting it to rise to 2.5% in this month.
GBP – Unemployment Report
For all the newbies, it’s one of the most eyed economic data as it shows a change in the number of people claiming unemployment-related benefits during the previous month. The recent jobs report is expected to be positive. Jobless claims rose to 6.2k in July but economists are expecting a lower number (3.6k) of claims in August. The smaller figure shows a growth in the labor market and it encourages the BOE (Bank of England) to keep the policy hawkish.
In addition to this, the unemployment rate is expected to remain unchanged at 4%.
EUR – German ZEW Economic Sentiment
The Zentrum fur Europaische Wirtschaftsforschung (ZEW) is due to release Germany’s economic sentiments at 10:00 (GMT). For your info, it’s a survey of about 300 German institutional investors and analysts, which asks respondents to rate the relative 6-month economic outlook for Germany.
The data is expected to be negative -13.5 vs. -13.7. Since the economic sentiment is below zero, it’s showing high-level pessimism among industrial investors regarding the European market. The Euro can trade under pressure as the investors will be expecting ECB to keep the interest rates on hold.