With less than two weeks until the Italian elections, the five star movement is currently leading the polls, with between 27 and 29 percent of the vote. However, this would not be enough for the party to lead on its own and the polls are indicating it could be a hung parliament. Similarly to Germany, it is likely a coalition will need to be formed for any party to lead, however the main parties have ruled this out. Four-time prime minister, Silvio Berlusconi’s party, the Forza Italia party has already agreed a coalition with Lega Nord. The polls suggest they might just gain enough votes to lead with a minority. Due to Italian law, no further polls are allowed to take place now before the election.
The UK Average Weekly Earnings posted as expected at 2.5%, up from 2.4% in the previous reading. Despite the rise, the figure still runs below inflation. The Unemployment Rate figure missed expectations, posting a bearish 4.4%. This is the first time unemployment has risen within the UK.
However, the report mentioned the rise in unemployment could be due to the number of people who were economically inactive decreasing, therefore falling into the unemployment status. A rise in the Unemployment Rate does not indicate greater unemployment in general, rather that individuals who were previously economically inactive (not actively searching for employment) are now looking, and therefore falling into the unemployed status (unemployed, but actively searching for employment). The Pound declined on the release of the Labour Data, as the Bank of England might require more evidence the labour market is strengthening before raising interest rates again.
The Eurozone released the Flash Manufacturing and Services PMIs this morning, as well as the individual readings of these figures from the two largest economies in the Eurozone; France and Germany. All the readings missed expectations, showing a slowdown within the two sectors. The report did show, however, that the Eurozone remained optimist about the year ahead, meaning the slowdown is likely to be short lived.
Bank of England Governor, Mark Carney is set to testify before the Treasury Committee this afternoon on the latest inflation report. Carney will face questions focusing on the forecasts and expectations for the inflation rate over the coming year. Across the pond, the US will be releasing the Existing Home Sales figure, along with the latest FOMC meeting minutes. The minutes will be closely analysed by the markets to see whether the tone of the Federal Reserve meeting was as hawkish as the markets believed.