Jobless claims in the U.K. surged 138.4K to 1.39M in February, marking the biggest drop in employment since record keeping began in 1971, which raised the claimant count rate to 4.3% from a revised reading of 3.9% in the previous month, while a separate report showed that average earnings including bonuses slipped to 1.8% during the three-months to January from a previous reading of 3.1%, which is the lowest level since 1991.
Fundamental Headlines
· IBM in Talks to Buy Sun Microsystems – Wall Street Journal
· China Rejects Coca-Cola’s Bid For Huiyuan Juice – Wall Street Journal
· Hedge Funds Seek Redemption With Pay-Outs – Financial Times
· Mexico Imposes Tariffs on U.S. Products as High as 45% After Truck Dispute – Bloomberg
· Niassan Debt Is First Step in Fed’s $1.3T Plan to Unblock Ledning – Bloomberg
GBPUSD – The Bank of England Minutes showed that the MPC voted unanimously to lower the benchmark interest rate by 50bp to a record low of 0.50% in March and to print GBP 75B to purchase government bonds, and went onto say that the scope of the program need to be ‘large enough’ to keep inflation in-line with the Bank’s medium-term target. Furthermore, the central bank said that there is a substantial risk to undershoot the 2% target for price growth, and stated that the overnight rate is likely to hold between 0.0-0.5% going forward. Meanwhile, jobless claims in the U.K. surged 138.4K to 1.39M in February, marking the biggest drop in employment since record keeping began in 1971, and raised the claimant count rate to 4.3% from a revised reading of 3.9% in the previous month. Meanwhile, a separate report showed that average earnings including bonuses slipped to 1.8% during the three-months to January from a previous reading of 3.1%, which is the lowest level since 1991, and labor conditions are likely to deteriorate further throughout the first half of the year as the economy faces a deepening recession. The data foreshadows a dour outlook for private-spending as workers face a weakening labor market, and as businesses continue to slash their work force in an effort to reduce costs, economic activity is likely to weaken further as households and firms turn increasingly pessimistic towards the economy. Discuss the topic and your trade ideas in the GBP/USD Forum.
CHFUSD – Retail sales in Switzerland increased 1.2% in January after rising at an annual pace of 3.6% in the previous month, and the outlook for private-spending remains bleak as the government forecasts the economy to face its worst economic downturn since 1975. Meanwhile, the breakdown of the report showed that demands for electronic goods rose 9.8%, while sales of healthcare products increased 6.5% however, discretionary spending on personal goods plunged another 12.1% after falling 20.0% in the previous month, and was followed by an 8.1% drop in cultural goods. As the economy faces a deepening recession, households are likely to cut back on spending as the labor market deteriorates, which is likely to weigh on the exchange rate as the outlook for growth and inflation falter. For more news and resources, visit the new Swiss franc Currency Room.
