Spreadex Market Update
Surprise drop in jobless claims steadies pound, but FTSE fails to find momentum
There are a few caveats attached to this morning’s data; the unemployment rate (unchanged at 4.9%, though it did fall to a fresh post-financial crisis low) and wage growth (up to 2.4% from 2.3% month-on-month, but lower than the 2.5% forecast) readings both cover the 3 months to the end of June, missing out on the real Brexit meat. And, obviously, it is well worth remembering that we are at the start of a very long journey, even if the past 2 months or so have packed enough drama in to last for years.
Yet despite all this the claimant count change was still a big surprise. Analysts had been expecting an increase of 5.2k; instead the number of people receiving unemployment benefits fell by 8.6k across July, with employers seemingly ignoring the panic caused by the referendum result. While this is no guarantee that the jobs sector is still in good health, especially considering the huge revisions that can often affect the claimant count change figure, it was enough to steady the pound, which is still holding at 1.30 and 1.155 against the dollar and euro respectively. The FTSE, however, couldn’t find much momentum after the jobs update, slipping 0.2% largely thanks to Admiral Group’s 8.4% plunge.
Looking to the afternoon and, bar the US crude oil inventories reading, there isn’t much for the markets to contend with. The Dow Jones is set to open at a 15 point loss, taking the index back below 18550 just days after it hit a fresh, post-18660 all-time high.
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