GBP
Yesterday the unemployment rate in the UK was unchanged at 6.0% in the three
months to October which fell short of expectations with the original consensus
of a fall to 5.9%. With this said, the unemployment total fell by another
63,000 during the quarter, to 1.958m.  On a positive note, we had the
average earnings which went up by 1.4% in the quarter (or 1.6% excluding
bonuses). This shows average earnings came in higher than CPI inflation,

GBP
Yesterday the unemployment rate in the UK was unchanged at 6.0% in the three
months to October which fell short of expectations with the original consensus
of a fall to 5.9%. With this said, the unemployment total fell by another
63,000 during the quarter, to 1.958m.  On a positive note, we had the
average earnings which went up by 1.4% in the quarter (or 1.6% excluding
bonuses). This shows average earnings came in higher than CPI inflation,
suggesting wages have slightly risen in real terms and workers are a little
better off.

Also in the UK, The Bank of England’s monetary policy committee was once again
divided by a 7-2 decision over interest rates this month. The December Minutes
meeting also expressed that the seven doves were unwilling to increase borrowing
costs until wages start increasing efficiently.

USD
The continued deterioration in the economic situation in Russia is
weighing on global investor sentiment. There has been a flight to the safe
haven of USD as fears increase that a weak Russian economy will destabilise
economic growth. 

In the US, inflation fell this month as the weak oil price cuts the cost of
gasoline. Consumer prices declined by 0.3% in November with the original
expectation being 0.1%. This was the biggest fall since December 2008 during a
time when the financial crisis was at full roar.  This brings down the
annual US inflation rate to 1.3%.

Janet Yellen raised a few points from her statement yesterday also. She
removed the term “considerable time” from the Federal Reserve’s
policy statement, and said it will be patient in how long it waits to raise
interest rates. 

Additionally, she noted that economic activity is growing at a moderate pace,
labour market conditions improved. 
The Fed also continued to stress the data dependency of its future policy
decisions, saying that if data is better than anticipated, then rates will
increase faster, while poor economic data would keep rates lower than
expected.

Key Announcements:
GBP – 09:30: Retail sales figures (Nov) expected to rise from 4.3% to
4.4% 
USD – 13:30: US inflation ( Nov) expected to be lower at -0.1% 
USD – 13:30: Initial Jobless claims expected to rise from 295,000 to 294,000

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