UK unemployment drops to 4.1%, the lowest reading since June 2020. The Dollar gained against its G10 peers as treasury yields were driven higher by rate hike bets.
January 18, 2022
GBP/USD 1.3637 GBP/EUR 1.1963 EUR/USD 1.1399 USD/CAD 1.2515 EUR/CHF 1.0422 EUR/SEK 10.3288 EUR/NOK 9.9996 EUR/DKK 7.4422 USD/ILS 3.1112 AUD/USD 0.7191 NZD/USD 0.6771 USD/SGD 1.3484 USD/JPY 114.60 USD/CNH 6.3575 USD/INR 74.5450 EUR/ILS 3.5490 GBP/ILS 4.2440 USD/ZAR 15.4546
Despite the surge in Omicron cases at the end of last year, the UKs labour market improved, with the unemployment rate dropping to 4.1% in the quarter through November, the best reading since June 2020. The number of workers on company payroll last month beat expectations. increasing by 184,000, whilst vacancies rose to a record 1.247 million.
The pound is regaining some ground after declining 0.25% against the Dollar during the Asian session. The FTSE has opened in the red, down 0.4% as investors react to the jobs data, and likely impact on future rate hikes.EUR
New reports show the introduction of Covid certificates in France, Germany and Italy increased uptake in vaccinations in those countries by 13, 6.2 and 9.7% respectively. Occupancy in intensive care units also lowered during the period as well as avoiding further lockdowns. The study estimates that without the policy intervention, GDP would have been €6bn, €1.4bn and €2.1bn lower.
EURUSD is down 0.15% this morning following broad strength from the greenback, trading just below 1.1400. European stocks declined, with the Stoxx 600 down 0.6% as of European open.USD
Following Jerome Powell’s comments earlier in the week, that inflation poses a “severe threat” to the recovery of the economy, a growing number of economists forecast more than three interest rate hikes this year. The Dollar gained against its G10 peers, as Treasury yields were driven higher by the rate hike bets.
Most stocks declined, with futures on the S&P and Nasdaq down 2% and 1.7% respectively. The energy sector was the only one to advance, with Brent oil rallying to the highest level in seven years, as concerns over the impact of Omicron on demand eased.ASIA/PACIFIC
The Bank of Japan kept policy unchanged as expected, however adjusted its view on inflation for the first time since 2014. The central bank suggest CPI is likely to fall around 1% by the end of the projection period in 2024. Governor Kuroda pledged to continue easing until the 2% price target is achieved. USDJPY is up 0.2% following the announcement.
The Australian and New Zealand Dollar were the biggest losers against the greenback, both dropping to one-week lows. Both AUD and NZD are down 0.5% against the Dollar.ILS
USDILS is little changed since yesterday, up 0.1% around the 3.1150 level.Data & Events
UK – Unemployment Rate
Euro Area – ZEW Economic Sentiment
Germany – ZEW Economic Sentiment
US – NAHB Housing Market Index
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