The UK labour market dominated the European trading session. A raft of data was released including the UK unemployment rate, claimant count change and average earnings. Overall the data showed that the current labour market recovery is slightly uneven. Unemployment rose to 5.6% and average earnings fell to a quarterly low of 2.4%, however, the claimant count change dropped further than expected to -4.9k. Labour market data is key at the moment as the Bank of England edge closer to its first interest rate rise in eight years.
In other news, Asian currencies have suffered their biggest two day selloff since the 1998 crisis as the fallout from China’s yuan devaluation continues. Yesterday saw the renminbi continue to fall to a low of 6.45 against the dollar and tumbling against all its major counterparties, this continuous fall in China’s currency came from an unexpected move from The People’s Bank of China earlier this week. However to dispel fears of further renminbi weakness, the PBOC stepped in last night and stated that there would be no further intervention or need for them to devalue its currency.
The world’s largest economy releases their retail sales figure this afternoon. The pace of growth in the US’s tertiary sector is pivotal in terms of overall GDP, as services account for roughly 70% in the world’s largest economy. June’s figure was surprisingly weak (-0.3%). This month’s number is forecast to rebound to a healthy 0.5%, keeping this year’s rate rise hopes alive.