Stocks Head Lower Despite UK Unemployment Rate Holding at 3.9%
Fiona Cincotta July 16, 2020 2:32 PM
European bourses are set to open on the back foot as US – Chinese tensions, in addition to worrying trends surrounding the Chinese consumer, drag on market sentiment. Negativity in the market is overshadowing better than expected Chinese economic growth and better than forecast UK jobs data.
Asian markets traded lower and European bourses are set to open on the back foot as US – Chinese tensions, in addition to worrying trends surrounding the Chinese consumer, drag on market sentiment. Negativity in the market is overshadowing better than expected Chinese economic growth and better than forecast UK jobs data.
For now, Tenreyo’s concerns are not being played out in the labour market. Jobs data continues to defy the reality of the deepest economic downturn in 300 years. Unemployment remained steady at 3.9%, the number of people claiming unemployment benefits actually declined by 28,000 rather than increasing by 250,000 and average earnings excluding bonuses jumped +0.7%.
US retail sales later today will be watched closely. Expectations are for a 5% mom in June, after a 17.7% surge in May. There is a good chance that we are still seeing pent up demand being released here. However, any weakness particularly after China’s data could deeply unsettle investors.
The Euro is trading on the back foot versus the safe haven USD but advancing versus GBP as investors look ahead to the ECB monetary policy announcement. The ECB are not expected to move on policy after increasing the Pandemic Emergency Purchase Programme by a more than expected €600 billion last month and amid tentative signs of economic recovery in the region. We can expect the ECB to return to the familiar wait and see mode.
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