Furthermore March's figure was revised upward to 19.9K from 14.6K originally reported. With the recent UK poll suggesting that more than a third of UK citizens are worried about job security, tonight's news may cast a pall on future UK retail spending.
Yesterday, the BRC monitor showed a slippage of -1.4% in same store sales suggesting that a retrenchment in consumer spending may already under way. The market however, ignored the headline figure and instead took its cue from the much larger than anticipated increase in wage gains which rose 4.2% against 3.6% consensus.
Many traders interpreted the spike as indicative of inflationary pressures within the UK economy - a dynamic which would force the BOE to maintain current rates despite softening economic demand. Most likely, the true demand for sterling today originated from the $2 Billion bid by Nasdaq for 15% stake in LSE. M & A order flows of course are temporary and once corporate demand is sated, the pound may revert back to trading on economic fundamentals which are starting look exceedingly bleak.
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Pounds Ignores Creeping Unemployment
- Wednesday, April 12 - 2006 at 14:21
Tonight's FX price action was centered on the pound which shrugged off the ominous signs of creeping unemployment as better than expected gains in wages and Merger and Acquisition flows helped buoy the currency. UK claimant count jumped to 12.6K new cases almost double the 6.5K forecast.
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Boris Schlossberg, Senior Currency Strategist, Daily FXWednesday, April 12 - 2006 at 14:21 UAE local time (GMT+4)
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