Tuesday was always going to be a very quiet day in relation to economic data during London trading hours. Global risk appetite picked up, commodity currencies strengthened and the pound continued its rally across the board.
Political events took centre stage but the reaction in financial markets was limited. France, the UK and the US was reported to be putting together a draft resolution for the crisis in Syria but outlining plans for Syria’s chemical weapons to be removed from the control of the Syrian government however Russia has already outlined its resistance to such a move.
The global community has been stalled longer than most people expected in terms of action over Syria however it now seems more and more likely that a political resolution rather than military intervention is on the cards. The US has almost been forced to back down following John Kerry’s comments on Monday.
With little else left to report on Tuesday all eyes move to Wednesday where the unemployment figures from the UK are due. With Mark Carney’s forward guidance in place, the data on the UK jobs market will be more in focus than usual. The pound has been steadily increasing over the course of the week and any reduction in the overall unemployment rate could very well see the pound climb further.
Will the bank of England’s forecast on 3 three year period before 7% unemployment is reached be called into question? Carney’s recent comments that 7% unemployment is not a trigger level for a rate hike but a mere indication does not exactly back the Bank of England into a corner although there may be a few red faces in the Bank should the unemployment rate drop within one month of forward guidance being announced.
9.30am – GBP – Claimant Count Change (Aug): Expected a fall of 22,000.
9.30am – GBP – ILO Unemployment Rate (Jul): Expected to remain at 7.8%.
12.00pm – USD – MBA Mortgage Applications: Expected to remain at 1.3%.
22.00pm – NZD – RBNZ Monetary Policy Statement and Interest Rate Decision: Expected to remain at 2.5%.