Spreadex Market Update
UK unemployment rate near decade low but wage growth sees sharp fall
Despite a near 2% fall from Brent Crude (the commodity so far this December doing its damnedest to prevent a Santa rally from appearing any time soon) the FTSE grew by around 45 points as Wednesday continued, even with a mixed bag of a jobs report. Unexpectedly falling to 5.2%, the UK unemployment rate was the undoubted star of this morning’s figures, hitting a near decade low. However, the jubilation that could have greeted that number was tempered somewhat by a sharper than forecast fall in the average earnings index, slipping to 2.4% from 3.0% just a month ago. Whilst the FTSE still managed its aforementioned gains, the pound, already a bit nervy given what could happen after this evening’s Fed meeting, increased its losses against the dollar following the morning’s weak wage growth data.
The Eurozone indices were similarly perky as Wednesday continued, a solid set of manufacturing PMIs and a 4 month high Eurozone-wide inflation number (at 0.2%) countered by an underperforming group of services PMIs and a lower than forecast trade balance figure. Still, given their flirtations with the red side of the loss/gain divide this morning, and the general air of jitteriness still lingering at the periphery of the markets, a 60 and 40 point jump for the DAX and CAC respectively is nothing to sniff at.
With the Dow Jones currently looking at a 100 point surge at the open, the US markets still have a few more hurdles to overcome before the Fed reveals its rate hike decision this evening. Building permits, housing starts and industrial production figures are all expected to improve, whilst the capacity utilization rate and flash manufacturing PMI are both forecast to see a slight fall.
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