Feeling the pressure
Today's news headlines:
‘UK labour market feeds inflation pressure with jump in wages’. Inflationary pressures, currently causing a headache for politicians and the Bank of England, are set to get worse as wages grow at the fastest rate in more than a year. Average weekly earnings, excluding bonuses, grew 5.7% from a year ago, the most since August 2021 and stronger than the 5.5% projected by economists. The release will keep pressure on central bankers to raise interest rates further as they seek to head off a wage-price spiral after consumer prices jumped the most in four decades at 10.1%. The BoE expects unemployment to climb above 6% over the next three years, but most companies will begin with freezing new hires rather than actively cutting jobs. (Bloomberg)
‘Brainard says Fed should probably "soon" slow pace of rate hikes’. A top Federal Reserve official thinks the bank should moderate the size of its interest rate hikes while they wait for the effect of cumulative tightening to filter through the economy. Lael Brainard stressed the importance of being data-dependent but emphasised that the central bank still has more work to do to bring down inflation. Her comments might mean more Fed officials voting for smaller 50bps hikes in December after the latest inflation data revealed price rises cooling last month. (Bloomberg)
An appeared thawing in US-China relations led Asian markets mostly higher overnight while US equity futures also rose. The trade-weighted US Dollar fell in early trading, with GBP/USD remaining around its highest level since late August.
UK Claimant Count Change: 3.3K vs 3.9K previously
UK Unemployment Rate: 3.6% vs 3.5% previously
UK Average Earnings Index 3m/y: 6.0% vs 6.1% previously
German ZEW Economic Sentiment: 10.00am
ZEW Economic Sentiment: 10.00am
US Empire State Manufacturing Index: 1.30pm
US PPI & Core PPI m/m: 1.30pm
G20 meetings: All day
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*Indicative interbank rates taken on the day of writing. Please speak to your Dealer to find out the current rates available for you.