UK unemployment unexpectedly rises causing sterling to fall marginally

Feb 19 • Mind The Gap • 2744 Views • Comments Off on UK unemployment unexpectedly rises causing sterling to fall marginally

shutterstock_33172354In Switzerland the ZEW index fell by 7.7 points in the latest survey, whilst overnight the Australian bank Westpac published its latest findings suggesting that economic confidence is waning slightly by 0.46%.

Britain’s unemployment rate has unexpectedly risen in the fourth quarter of last year, suggesting that the recent improvement in the labour market was temporary. The jobless rate measured by International Labour Organization methods rose to 7.2 percent, the first increase since February last year, from 7.1 percent in the three months through November, the Office for National Statistics said in London today.

ZEW Switzerland – Economic Sentiment Weakens

Economic expectations for Switzerland have reached a reading of 28.7 points in February 2014. Therefore, the ZEW-CS-Indicator decreases by 7.7 points compared to the previous month. The weaker economic outlook is likely to be caused by the approval of the national referendum to stop mass immigration, which could impact on employment, investments and the general attractiveness of Switzerland as a business location. The ZEW-CS Indicator reflects the expectations of the surveyed financial market experts regarding the economic development in Switzerland on a six-month time horizon.

UK Labour Market Statistics, February 2014

The percentage of people aged from 16 to 64 who were in work (the employment rate) was 72.1%. The employment rate is up 0.3 percentage points from July to September 2013 and up 0.6 from a year earlier. There were 30.15 million people in employment aged 16 and over, up 193,000 from July to September 2013 and up 396,000 from a year earlier. •The percentage of the economically active population aged 16 and over who were unemployed (the unemployment rate) was 7.2%. The unemployment rate is down 0.4 percentage points from July to September 2013 and down 0.6 from a year earlier. There were 2.34 million unemployed people aged 16 and over.

Australia Westpac-MI Leading Index Falls Slightly In

The six month annualised deviation from the trend growth rate of the Westpac-MI Leading Index of Economic Activity, indicating the likely pace of economic activity three to nine months ahead, fell to 0.46% in January from 1.09% in December. The dip in the leading index shows a softening in the last few months, though it still indicates above trend growth.

Market snapshot at 10:30 am UK time

The ASX 200 closed up 0.29%, the CSI 300 was up 1.15%, with the Hang Seng up 0.34%. The Nikkei sold off by 0.5%. Europe has opened mainly down; the CAC is down 0.07%, DAX down marginally by 0.15%, STOXX down 0.23% and the UK FTSE up 0.10%. Looking towards new York’s open the DJIA equity index future is down 0.02%, SPX future down 0.06% and the NASDAQ future is up 0.05%. NYMEX WTI oil has continued its momentum now it’s passed through the critical $100 a barrel psyche level to be up 0.32% at $102.76 per barrel. NYMEX nat gas is up 2.36% at $5.69 per therm .

Forex focus

The yen gained 0.2 percent to 102.13 per dollar early London time after dropping 0.5 percent in the past two days. It appreciated 0.2 percent to 140.51 per euro. The U.S currency was little changed at $1.3761 per euro after earlier touching $1.3773, the weakest level since Jan. 2nd.

The yen climbed for the first time in three days against the dollar as Japanese stocks declined, boosting demand for the currency as a haven.

The pound was little changed at $1.6691 early London time after falling 0.4 percent in the previous two days. Sterling climbed to $1.6823 on Feb. 17th, the highest since November 2009. The U.K. currency was at 82.41 pence per euro after depreciating 0.6 percent yesterday, the most since Feb. 3rd. The pound snapped two-day declines versus the dollar and euro before the Bank of England publishes minutes of its February policy meeting.

Bonds briefing

The benchmark 10-year yield dropped less than one basis point, or 0.01 percentage point, to 2.70 percent early London time. The price of the 2.75 percent note due in February 2024 was 100 13/32. The yield dropped to 2.69 percent yesterday, the lowest level since Feb. 11th. Treasury 10-year yields fell toward the lowest level in a week as measures of U.S. economic data showed data are falling short of expectations by the most in three months.

Germany’s 10-year bund yielded 1.67 percent early morning London time. The rate dropped to 1.60 percent on Feb. 5th, the least since Aug. 1st. The price of the 1.75 percent bond due in February 2024 was 100.72. Germany last sold 10-year securities on Jan. 29th at an average yield of 1.77 percent. Germany’s government bonds were little changed as the nation prepared to auction 5 billion euros ($6.88 billion) of debt maturing in February 2024 today.

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