Spreadex Market Update
Pound loses confidence following UK wage growth fall
"Despite the ostensible focus on this evening’s Fed meeting, the US is actually facing an onslaught of last minute data for the central bank to consider."
Considering that in real terms rising inflation is going to erode wages even further – the last CPI reading was 1.8% – it was this latter fact the market mainly focused on this Wednesday. Sterling saw its gains against the dollar half to 0.3% once the jobs data was released, while against the euro the pound is now up 0.1%, a third of where it stood earlier in the day. The FTSE, on the other hand, was less fussed, its 15-ish point increase keeping the index in the middle of its current trading bracket.
Over in the Eurozone the DAX and CAC were pretty quiet, and for good reason. The Netherlands is currently voting in an election that could see Geert Wilders – who is anti-EU like his far-right compatriots across the continent – take office, an outcome one imagines most investors are hoping to avoid.
Despite the ostensible focus on this evening’s Fed meeting, the US is actually facing an onslaught of last minute data for the central bank to consider. Most pressing is the inflation reading, which is set to fall from 0.6% to 0.0% month-on-month; retail sales are also forecast to slip, from 0.4% to 0.2%, as is the Empire State manufacturing index, from 18.7 to 15.3. While this final flurry of negative news is unlikely to change the Fed’s mind so late in the day, it could cause a few jitters to appear on the market.
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