23/06/2017 - Weak Pound And Worker Shortage Hits Farmers

GBP

Despite Theresa May proposing a new deal for EU citizens living in Britain concerns have been raised about the shortage of seasonal workers this year to harvest fruit and vegetables linked to the decision to leave the European Union and the related weakness of the pound according to a survey released by the National Farmers Union.
 
The proportion of workers returning to undertake seasonal work has fallen a record low of 33 percent while labour providers were unable to meet their recruitment targets in May by 1,515 people or  close to 16.7 percent.
 
Lack of clarity regarding the UK’s future relationship with the EU as well as a weaker pound against the Euro were sighted as the reasons for the drop off. Farmers recruit seasonal workers mainly from eastern EU countries such as Bulgaria and Romania. This in ability to source seasonal workers could lead to an increase in wage costs, having a knock on effect on summer vegetable prices in the UK creating further inflationary pressure.
 
In more positive news, British factory orders have hit their highest level in nearly 30 years according to the Confederation of British Industry. The CBI said its factory order book balance jumped to +16 in June, its highest level since 1988. Export order growth was its strongest in 22 years, the CBI said, helped by the fall in the value of the pound.

USD

The number of Americans filing for unemployment benefits increased slightly last week, but remains at levels consistent with a tight labour market.
 
Initial claims for state unemployment benefits increased 3,000 to a seasonally adjusted 241,000 for the week ended June 17, the Labour Department said on Thursday. This week's tally is the 120th consecutive week that claims have been below 300,000, the threshold associated with a strong labour market. It's the longest stretch that the U.S. jobs market has remained below that level since 1970.

Key Announcements 

09:00 – EUR - Preliminary  Market Services PMI (June)  expected to fall to 56.2 from 56.3