Sterling benefits from unemployment at a 7-year low – 12th November 2015
On the so-called singles day in China (so called because of the date 11/11) singles spent a collective £9.4bn just at Alibaba. One of them, paid £32m for an engagement ring at a Geneva auction!
Otherwise it was a fairly dull day for economic data but it was better-than-expected employment figures that drove the top two currency performers, the Australian Dollar and the British Pound. With Sterling, investors were far more interested in the seven-year low of 5.3% for UK unemployment than they were in the unchanged 3.0% increase in overall earnings or the 3,300 extra jobseekers.
With the Aussie, investors were blown away by news of 58,600 new Australian jobs (most full time) and a fall in the rate of unemployment from 6.2% to 5.9%, an 18-month low. They marked the Australian Dollar two cents higher, turning what had been an ordinary day into a special one. The Aussie saw net gains of one and a quarter cents against Sterling.
The Bank of England’s unprecedented “open discussion on the role of markets in society” passed by with no mention on monetary policy or exchange rates despite the guest list featuring the Boe Governor, the Chancellor of the Exchequer and the president of the European Central Bank.
In the absence of their input, the FX market struggled for inspiration. The only data of any consequence were the UK employment statistics and, much later, the Australian jobs numbers. As a consequence, most of the major currencies remained almost stationary. For the NZ Dollar it was a rerun of what happened last Tuesday: News putting a positive tilt on Australian interest rates served to remind investors of the negative slant on Kiwi rates. The NZ Dollar suffered the day’s biggest loss, dropping two cents.
The ECB president will be speaking this morning to the European parliament’s Committee on Economic and Monetary Affairs (ECON). After lunch no fewer than six Federal Reserve bosses will give speeches, as will the Bank of England’s chief economist, Andy Haldane.
Alongside the juicy prospect of eight central bankers strutting their monetary stuff, the daily ecostat selection looks decidedly dull. There are inflation data from Germany, Sweden and France, industrial production figures from the Eurozone, new house prices from Canada and weekly jobless numbers from the US. But never mind those. Investors will be far more interested in what the central bankers have to say. The folk from the Fed will probably stick to hinting at a December rate increase. Mr Haldane may say something startling Draghi will be pretty much obliged to open up about fresh quantitative easing.