Pound slides after dovish comments from Broadbent
- USD - JOLTS Job Openings: 5.67M
- GBP - MPC Member Haldane Speaks
- GBP - MPC Member Broadbent Speaks
The Pound declined yesterday for the fourth consecutive day after Ben Broadbent, Bank of England Deputy Governor, said he was not ready to raise interest rates just yet. He mentioned ‘mood of business’ as the key factor behind his thinking and that he thought economic growth was ‘okay’ at the moment with employment rate being good. Broadbent also spoke at the Scottish Council for Development and Industry earlier in the day, where he focused on how Brexit could be damaging to the UK, if there is a reduction in trade with the European Union. Broadbent mentioned how less trade would increase prices, with the UK possibly having to look at producing goods it currently imports from the EU. The comments come as the DUP, who support Theresa May’s minority government, are pushing for the UK to exit Europe’s Single market.
Across the pond, the JOLTS job openings figure posted worse than expected at 5.67m, showing a slighter weaker labour market than was originally thought on Friday when non-farm payroll showed 222,000 jobs were added. The construction, transport, warehousing and utilities industries showed the largest decline, whereas job openings grew in retail trade and educational services. Two dovish members of the FOMC also spoke yesterday afternoon. The first, Lael Brainard, expressed caution to raising interest rates but is comfortable with the plans to start shrinking the balance sheet. The second, Neel Kashkari, citing low wage growth as a reason to not raise rates, meaning that the US economy is not in danger of overheating with low wage growth.
- GBP - Average Earnings Index 3m/y
- USD - Fed Chair Yellen Testifies
- CAD - BOC Press Conference
Today the markets will be focusing on Fed Chair, Janet Yellen, as she starts her two-day testimony to Congress on the semi-annual monetary policy report. The first of the testimonies will be in front of the House Financial Services Committee before speaking to the Senate on Thursday. The markets will be watching for any hawkish tones, hinting at the next rate hike. Back in the UK, the average earning index figure will be released, which is expected to drop to 1.8%. Also out today is the claimant count change and unemployment rate. Claimant count change is forecasted to increase to 10.4k from last month’s 7.3k with the unemployment rate set to remain sticky at 4.6%.