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FTSE, Sterling Jittery Ahead Of UK Jobs Report

Published 15/05/2018, 08:45
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The European indices once again got off to a muted start, investors waiting for the UK jobs report and eurozone GDP reading before doing anything rash.

The FTSE started the session effectively flat at 7710, unable just yet to muster enough momentum to mount a charge on mid-January’s 7800-teasing all-time highs. Whether or not the week will see the index come close to that target may be down to how sterling reacts to Tuesday’s jobs report.

Drifting back under $1.355 against the dollar following a 0.1% dip, while sitting unchanged just above €1.135 against the euro, the pound was as reticent as the FTSE this Tuesday – and for good reason. That’s because the average earnings index for the 3 months to the end of March, including bonuses, is set to slip from 2.8% to 2.7%; higher than the 2.5% inflation reading from March, and a crucial boost to real wages, but not exactly the hawkish direction the pound wants to see things moving in. Granted, strip out bonuses and forecasts have the wage figure hitting 2.9%, so the currency could be selective in what data it pays attention to as the day goes on.

Over in the eurozone the DAX has already been disappointed by Germany’s preliminary Q1 GDP reading, the index slipping 0.2% after the country’s growth came in at 0.3% against the 0.4% forecast and the 0.6% seen in Q4 2017. That might not bode well for the latest glimpse at the region-wide figure, which is currently expected to hold at the 0.4% reported previously.

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