Spreadex Market Update

43-year low UK unemployment rate helps ease wage growth blow for sterling



Things began to flatten out as lunch time approached, with a whole mess of European data momentarily drawing focus from the Turkish lira crisis.

The wind was taken out of the pound’s sails following the UK jobs report. Initially up 0.4% against the dollar, those gains were halved as wage growth (including bonuses) unexpectedly slipped from 2.5% to 2.4% for the April to June quarter. The damage dealt to sterling likely would have been greater if it weren’t for the surprising drop in the unemployment rate, however, which fell from 4.2% to a fresh 43-year low of 4.0%.

As for the Eurozone, a better than forecast Q2 GDP reading, which rose from the initially estimated 0.3% to 0.4%, did little for the region’s indices. In fact, the DAX and CAC gradually lost their lustre as the day went on, with both now struggling to stay in the green as Turkish President Erdogan continued to show no sign of taking the steps needed to rescue the lira.

Turning to this afternoon and there is a chance the Dow Jones can heat up the chilly European indices. The futures have the Dow jumping 125 points after the bell, a move that would just above push the index above 25300 having suffering a 4 day losing streak.

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