The pound is mixed this morning, consolidating against the euro, but gaining against the dollar ahead of the labour market statistics release. Jobless benefit claims are expected to have risen by 15K in June from May, when they jumped 19.6K, In addition, headline ILO unemployment rate is forecasted to remain unchanged at 7.7% in May. Average weekly earnings growth is also projected to improve to 2.1% in May, from 1.8% in the previous reading. Separately, the Office for Budget Responsibility will publish its first Fiscal Sustainability Report and HM Treasury will publish Whole Government Accounts. These publications will provide more details into government liabilities and are likely to report alternative ratios of public debt to GDP. Expect for the pound to remain in current ranges should we see the data coming out in line with expectations.
The euro dropped against most of its major rivals on concern Europe’s debt crisis is spreading as Ireland became third country to have its credit rating cut to below investment grade. Moody’s Investor Service cut Ireland to Ba1 from Baa3 with outlook remaining “negative”, saying that county will require additional official financing. This news came couple hours after the IMF (International Monetary Fund) said that Italy is experiencing a “weak” recovery and urged the nation to continue with its fiscal consolidation. Looking ahead to today, Eurozone Industrial Production headlines the economic calendar, with the expectations for the figure to consolidate in May.
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