A broadly better than forecast UK jobs report helped the pound eke out a fresh 3-year peak against the dollar.
Though the unemployment rate crept up, as expected, to 5.1% for the first time since 2016, there was good news elsewhere.
The average earnings index for the 3 months to December rose from 3.7% to 4.7% month-on-month, skipping past estimates of 4.1%.
And, most importantly, January’s claimant count change reading saw a 20,000 reduction in the number of people claiming unemployment-related benefits, instead of the near 14,000 addition forecast. Even better, the number from December was revised from +7,000 to -20,400.
So while the unemployment rate might be stealing headlines, the rest of the report was good enough to, at the very least, keep the UK markets from posting any major losses.
GBP/USD spent the morning flirting with $1.408, while against the GBP/EUR pushed past €1.1575 to sit at what is essentially one-week away from being a 12-month high. The FTSE, on the other hand, sat pretty flat at 6,620.
The UK markets find themselves at an interesting crossroads after Boris Johnson’s lockdown easing announcement. Investors have been handed a bunch of new yardsticks by which to judge the next few months, as well as a reason to anxiously watch the daily covid-19 numbers once schools reopen on March 8th. One can imagine spurts of jittery trading every time we now approach each one of the dates laid out by the Prime Minister on Monday.
Elsewhere the biggest movement can in Germany, as the DAX dropped back below 13,900 following a 0.7% decline.
As for the US open, the Dow Jones managed to close 27 points higher on Monday, putting the index back in the ballpark of its all-time highs. The Dow is set to add around 40 points when trading gets underway this afternoon.
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