GBP

So as was widely expected this week,
wages are growing at a faster rate than inflation. Pay growth including bonus’
hit 1.7% and inflation is at 1.6%. This is the first time wages are growing
faster than inflation since the height of the financial crisis in 2008 apart
from a brief period in 2010. Interesting to note that real wages are still 7.7%
lower than they were in 2007 so there is still some way to go.

GBP

So as was widely expected this week,
wages are growing at a faster rate than inflation. Pay growth including bonus’
hit 1.7% and inflation is at 1.6%. This is the first time wages are growing
faster than inflation since the height of the financial crisis in 2008 apart
from a brief period in 2010. Interesting to note that real wages are still 7.7%
lower than they were in 2007 so there is still some way to go.

If this is sustained then it will be
very positive for the economy as people will have more money to spend on goods
and services and should push up GDP

Also the unemployment rate fell a lot
further than expected to 6.9% in the 3 months to February from 7.1%. This
figure is significant as it is the first time unemployment has fallen below the
7% threshold the Bank of England set for considering an interest rate hike,
before it changed its forward guidance on monetary policy. 

The number of people claiming Job
seekers allowance fell by 30,400 in March, the lowest level since November
2008.

All really positive data coming out
from the UK which continues to cement a strong recovery in the UK.

Not surprisingly, the pound had a
good day yesterday, peaking to near 5 year highs against US dollar and
strengthening against the euro. 

EUR

Inflation in the Eurozone last month
dropped to its lowest level in over 4 years falling to 0.5% in March. This is
going to continue to stoke fears of deflation in the Eurozone and will probably
force Draghi to come out with a statement in response to this.

The euro didn’t really weaken
yesterday on the back of this news as it was probably already priced in as it
came in line with expectations.

Today

The only
notable data out today is out from the US where the number of people filing for
jobless claims is forecasted to increase by 15,000 – which could well put the US
dollar under further selling pressure.

Key Announcements:

13:30pm – CAD – Consumer Price Index
(Mar): Expected to fall to 0.4%.

13:30pm – USD – Initial Jobless
Claims: Expected to rise to 315,000.

15:00pm – USD – Philadelphia Fed
Manufacturing Survey (Mar): Expected to rise to 10.