Yesterday saw markets trade sideways across the board


A quiet start to the week, yesterday, saw markets trade sideways across the board. In the US, Martin Luther King day, resulted in a lack of liquidity and trading in the market but it is business as usual today.

This being said we expect another quiet day for markets. Today’s most notable release was UK labour data out this morning. The unemployment rate dropped from 4.2% to 4.1%. Claimant count change came in at -43.3k from a previous -49.8k, and average earnings came in where the forecast had predicted at 4.2%.

While the labour market appears to be on the right track, UK politics seems to be taking a very different path. Over recent weeks, multiple reports suggest the Prime Minister, and many of his colleagues, participated in illegal gatherings and parties during national lockdown. Dubbed ‘party gate’, this clear breach of the rules has resulted in growing pressure on the PM to resign. During the first PM’s Questions post ‘Party Gate’, Boris Johnson offered a simple apology and urged MP’s to await the result of the inquiry. It will be interesting to see how he navigates the next PMQ.

Tomorrow will see the latest round of UK inflation data. Given the already staggering reading, any increase month on month would lead us to believe another rate rise could happen as early as February. Bank of England Governor Bailey will speak in the afternoon and his comments should be closely watched.

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