The FTSE had a right ol’ horrible time of it on Wednesday, with a hawkish jobs report and a tsunami of high street horror stories sending the index lower.
While the unemployment rate unexpectedly fell to a joint 42 year-low of 4.3%, wages were, as ever, the focus of the jobs data, and for once they were pretty stellar. For the 3 months to January wage growth, including bonuses, rose to 2.8% from an upwards revised 2.7% the month previous. With inflation pulling back from 3.0% in January to 2.7% in February, if the average earnings index can post similar figures next month the more than yearlong decline in the UK’s real wages may come to an end.
It also means that UK consumers may be better equipped to deal with a potential May rate hike from the Bank of England. Or at least the pound thinks so, with sterling jumping 0.5% against the dollar and 0.2% against the euro. This, combined sentiment-eroding updates from high street staples Kingfisher (LON:KGF) (which owns B&Q), Carpetright, New Look, Moss Bros and Mothercare, dragged the FTSE down by 0.6%, leaving it just above 7030.
It’s going to be interesting to see if the FTSE and pound can maintain their UK-specific trading, or whether their respective performances will become more homogenous with the rest of the markets as investors turn their attention to Wednesday evening’s likely rate-hiking Fed meeting. If the Dow Jones futures are anything to go by, investors are preparing to sit on their hands, with the US index set for a meagre 20 point rise after the bell.
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved. In relation to fixed odds, Spreadex Ltd is licensed and regulated by the Gambling Commission under licence number.