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The GBP had a tumultuous day of trading against the USD with a range of more than a cent, spiking during the morning and then trailing off again over the course of the day. Against the EUR, however, the movements were far more muted, closing almost exactly where we opened and with only minor changes in the rate from start to finish.

There were no surprises from the UK Bank of England (BoE) Interest rate decision, which remained steady at the 0.5% that was forecast. The interesting aspect here will be in the following weeks if we learn that any members of the committee have mooted a change in rates, as the last commentary revealed that there were two members that used rhetoric that may indicate a change. The Asset Purchase Facility did not change either, as was expected, although this is structured in a longer term view when compared to the European Central Bank facility. Consequently, it produces less immediate wrinkles in the inflation data (when isolating the impact versus other factors).

The United States’ jobs data was slightly positive. It recorded a drop in Initial Jobless Claims and Continuing Jobless Claims and a marked increase in the Unit Labour Costs – the cost of employing a labour force. This is probably more important now, given that increases in labour costs will feed overall costs to producers who will eventually put pressure on prices to consumers. Additionally, a core element to this figure is staff wages necessary to produce a unit of output. Increasing wages put pressure on prices as well which, combined with the other data, is positive for the States in light of their inflation/interest rate focus.

Today promises another bumper set of figures. The next to be produced today is a survey of consumer inflation expectations, a measure of how consumers view the changes in the inflation rate during the next year. Then we will hear about Eurozone Gross Domestic Products, which is forecast to remain flat both on a quarterly and a yearly basis.

Next, of course, being the first Friday of the month, we receive the more significant jobs data from the US. The Non-Farm Payrolls is always a big mover – it measures the change in the number of payrolls in all non-agricultural businesses. This is forecast to remain fairly flat at +225k. The States will also produce their earnings data, and their Unemployment Rate, which again is forecast flat. I always find that jobs data, anywhere near an election, becomes interpreted as much more critical than usual. Politicians like to talk about people’s jobs and how they have created opportunities for the average American.

Overall today, one thing is certain. We are likely to see another choppy day as so much of the data is central to investor sentiment.

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