The recent positive data trend of the UK economy continued yesterday with the unemployment rate unexpectedly dropping to 4.8%, an eleven year low. Average earnings also exceeded economist’s consensus growing 2.3% in the year to October. However, Sterling remained fragile yesterday as Italy’s Economic Development Minister Carlo Calenda said that the British government’s Brexit strategy is chaotic, injecting uncertainty into the Pound.
Across the pond, President-elect Donald Trump is struggling to form a transition team. Former House Intelligence Committee Chairman Mike Rogers left the team earlier this week. The departure has led Trump to consider nominating Texas Senator Ted Cruz to serve as US attorney general.
The Eurozone and the US are both set to release key inflation data today. Firstly, the single currency zone is set to see their yearly CPI figure remain at 0.4%, if this remains it will give some respite from deflationary pressures for the ECB to have to tackle. The US monthly Consumer Price gauge is anticipated to rise from 0.3% to 0.4%. This will again add further evidence for the Fed to pull the trigger on a rate hike in Decembers meeting. Leading into the afternoon Janet Yellen, the head of the Fed testifies in Washington about the economy outlook of the US. Depending on Fed Chair Yellen’s tone this will no doubt cause some volatility for the Greenback.