There was a relatively quiet start to the week on financial markets yesterday. This was partly due to a sparse data schedule on both sides of the Atlantic and a partial market holiday in the US.
Meanwhile, currency markets remained range bound. Of the limited moves to note, the euro was holding a slightly softer tone throughout the European session. At the same time, the dollar was in the ascendancy overnight, amid hawkish remarks from Fed Governor Waller.
Already today, The pound strengthened versus the euro after the ONS announced on-target wage growth and a fall in the UK unemployment rate.
UK earnings, excluding incentives, increased by 4.9% from June to August 2024. Including bonuses, it increased by 3.8%.
Both readings were consistent with forecasts and are unlikely to significantly change expectations for the Bank of England’s impending interest rate decisions.
However, an unexpected drop in the unemployment rate to 4% from 4.1% calls for a gradual approach to rate cuts.
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