Daily Market Report 20/02/2014

GBP
 
The big news out yesterday was the unemployment rate rising to 7.2% from 7.1%.
So just as Carney was starting to get worried that the unemployment rate was
going to reach his target of 7%, we see the inverse happen.
 
The pound did weaken off on the back of this but not as much as what could have
been expected.
 
The reason for this was that when you look further into data, it showed that

GBP
 
The big news out yesterday was the unemployment rate rising to 7.2% from 7.1%.
So just as Carney was starting to get worried that the unemployment rate was
going to reach his target of 7%, we see the inverse happen.
 
The pound did weaken off on the back of this but not as much as what could have
been expected.
 
The reason for this was that when you look further into data, it showed that
the claimant count (people claiming benefits) fell by 27,600 and the total
number of people out of work actually fell by 125,000.
 
Also average earnings year on year rose by 1.1% yesterday closing
in on the inflation figure of 1.9%. The gap in these figures is now
decreasing and some economists think that by the end of the year wages may
actually start to rise ahead of inflation.
 
In the latest Bank of England Minutes, we saw all members vote to keep interest
rates at 0.5% and quantitative easing at ÂŁ375bn. 

USD
 
In the Fed Minutes that were released last night, they have said the current emerging
market turmoil and the recent poor economic data will not stop them tapering
QE.  After the release of this at 7pm last night the dollar gained against
most currencies.
 
They have also indicated that they will revise 6.5% unemployment threshold for
when they look to increase interest rates, citing the current inflation levels
as a reason for changing this.

Key Announcements:

13:30pm
– USD – Consumer Price Index (YoY) (Jan): Expected to rise to 1.6%.

13:30pm
– USD – Initial Jobless Claims (Feb 14): Expected to fall to 335,000

13:58pm
– USD – Markit Manufacturing PMI (Dec): Expected to fall to 530

15:00pm
– EUR – Consumer Confidence (Jan): Expected to increase marginally to -11.